IRS says evaluation is required to search out out the price refund tax

Daily tax report: International

August 16, 2021, 10:11 pm

  • Agency memo deals with the tax treatment of drug-free reimbursement
  • The analysis includes how much US companies will benefit from paying the fee

A pharmaceutical company’s U.S. subsidiary needs to consider several factors to determine how much tax will be charged on a reimbursement payment for a fee, including the benefit in which it will benefit from paying the fee, the IRS said.

In a memo by the Chief Counsel Advice released Aug. 13, the IRS looked at the treatment of a reimbursement payment for the Affordable Care Act’s Branded Prescription Drug Fee – a fee or excise tax for companies that import or manufacture branded prescription drugs. The fee cannot be deducted.

The memo considers a case involving a US-based limited risk distribution company that is part …

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