GSK building new $557 million factory because of new U.K. patent box regime

post Monday May 28, 2012

The new patent box regime in the United Kingdom, effective April 1, 2013, prompted GlaxoSmithKline’s CEO into building its first new factory in the United Kingdom in almost 40 years.

On March 22, Sir Andrew Witty said that the introduction of the patent box “has transformed the way in which we view the U.K. as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made in Britain”.

The patent regime would allow companies to apply a 10% rate of corporation tax from April 1, 2013, to all profits attributable to qualifying patents.

On Nov. 29, 2010, the same day the U.K. government announced its consultation on the patent box regime, GSK pledged to invest an additional $784 million in the United Kingdom because of the government proposal. GSK said its new manufacturing investments would create 1000 new jobs.

In addition to this, GSK said it will also invest over $280 million in the existing facilities, to enable the company to manufacture materials for respiratory medicines, and to produce aluminum adjuvants used in the manufacture of vaccines.

The government’s tax measures are attracting investment. The new patent box regime and further reductions in U.K corporation tax make it advantageous for pharmaceutical companies to invest in Scotland and Britain. The annual report pointed out that the U.K. government’s recent proposed changes in tax law will significantly affect GSK. These changes include the phased reduction in the main rate of corporation tax from 28% to 23%, the patent box regime, and draft legislation relating to controlled foreign companies.

[Source: Transfer Pricing Report: News Archive>2012>Around the World> United Kingdom: U.K. Patent Box regime Prompting GSK To Build New $557 Million Factory, CEO Says]

Image Courtesy of: http://www.medicalfacts.nl/wp-content/uploads/2009/02/gsk.jpg

Leave your comment

Comments on 'GSK building new $557 million factory because of new U.K. patent box regime' (3)