Astra settles tax row for £505 million

The Anglo-Swedish drugmaker is to pay 505 million pounds to British tax authorities to resolve claims dating back to 1996, with a first instalment of 350 million pounds in March 2010 and a second of 155 million in March 2011.

AstraZeneca will release part of its provision to earnings to deal with the settlement.

"As a result of this release, the group tax rate for 2010 will be approximately two percentage points lower than previous guidance," the company said in a statement.

"AstraZeneca has increased its 2010 target for core earnings per share from $5.75-$6.15 to $5.90-$6.30 per share to reflect this lower expected tax rate."

The tax dispute centred on the issue of transfer pricing.

Transfer pricing concerns the price at which one unit of a group sells goods or services to another unit of the same group. Such practices are receiving increased attention as tax authorities around the world seek to limit any abuse of intra-company transfers of expenses or profits.

(Reporting by Ben Hirschler, editing by Will Waterman)

($1=.6469 Pound)