Perrigo Mostly Prevails in Transfer Pricing Dispute With IRS

A US district court largely sided with pharmaceutical company Perrigo Co. in a long-running transfer pricing dispute with the IRS, in a case touching on issues of economic substance and the arm’s-length standard.

Perrigo’s transactions with a subsidiary in Israel didn’t lack economic substance as the IRS had argued, the US District Court for the Western District of Michigan said in largely siding with the company’s transfer pricing position, with some refinements. The court also found that the agency’s penalties weren’t appropriate.

The court directed Perrigo and the IRS to file a proposed judgment consistent with Thursday’s ruling.

Perrigo ...