You’d think the billions of dollars multinational pharmaceutical giant Pfizer was getting in subsidies to develop the COVID-19 vaccine, and raw dollars from governments who were buying it, would be enough.Instead, Pfizer has submitted documents ahead of the next federal budget asking for a tax cut, in the form of more credits for research. They want the corporate tax rate to stay as it is, but claim Canada should ease off its closing of loopholes that allow companies to move profits around in their books from high-tax to low-tax jurisdictions.
From The Globe and Mail:
“To retain and grow biopharmaceutical manufacturing and R&D activities in Canada, the tax regime must provide certainty and predictability in order to be effective as incentive for investments. […] Unfortunately, over the last decade, Canada has been viewed as a jurisdiction in which transfer pricing is systematically and aggressively challenged by the Canada Revenue Agency.”
This isn’t quite extortion, as it’s not a direct threat about the COVID-19 vaccine. However, the letter does go on to say that if OECD proposals to close off this tax loophole were implemented in Canada, they’d “introduce additional uncertainty for [multinational enterprises] and discourage them from maintaining or growing their activities in a country like Canada.”
So there you have it. Let us move our profits offshore, or we’re going to do less business in your country, and don’t forget all that vaccine stuff you’re getting.