AstraZeneca Resolves Issue with U.K. tax Authorities

After settling a 15-year dispute with U. K. tax authorities, drug manufacturer AstraZeneca PLC raised its 2010 earnings.

AstraZeneca will pay £505 million ($781.7 million) in two installments to resolve the so-called "transfer pricing" claims dating back to 1996. Transfer pricing refers to the pricing of assets, services and funds transferred within an organization.

It plans to release part of its revenue to deal with the U. K. settlement.

According to AstraZeneca's fourth-quarter report, it had set aside £2.33 billion to cover its transfer pricing audits.

A spokesperson for AstraZeneca said, "The fact that we've been able to resolve such a complex and long-running issue is clearly a positive sign".

The company has lifted its earnings per share forecast for this year from between $5.75 and $6.15 to $5.90 to $6.30.

AstraZeneca will pay its first installment of £350m in March 2010 while the second of £155m in March 2011.

After GlaxoSmithKline PLC, AstraZeneca is U. K.'s second largest drug maker, which was formed in 1999. At present, the Group boasts of more than 65,000 employees and operations in more than 100 countries.