1 month, 1 week ago redecatur.com
Move will reduce taxes while company continues to receive incentives from Illinois
Walgreens CEO, Gregory D. Wasson, announced that it plans to move its corporate headquarters to Switzerland as part of a merger with Alliance Boots, a European drugstore chain. The move will allow Walgreens profits to be taxed a lower rate in Switzerland and reduce Walgreens taxes in Illinois.
Walgreens plans the move, even though the taxpayers of Illinois gave it a $6 million tax credit over a period of 10 years, provided $625,000 in training money and $875,000 in additional tax incentives.
Walgreens tax strategy is called “an inversion.” A U.S. company buys or merges with a foreign company in a low tax jurisdiction, moves its headquarters there, but continues to generate business and profits in the U.S.
According to the New York Times, Neill Geiser, assistant director of Change to Win Initiatives said, “It is unconscionable that Walgreens is considering this tax dodge – especially in light of the millions of dollars it receives from the U.S. taxpayers each year.”
Walgreens received $16.7 billion from Medicare and Medicaid last year. Walgreens’ move will cost U.S. taxpayers about $4 billion over a period of 5 years. (Andrew Sorkin, “Renouncing Corporate Citizenship” N.Y Times, July 1, 2014 p. B8)