AstraZeneca posts 1.21 pct share gains after tax settlement

The agreement, announced today results in the drug company paying £505m to the government for a 15 year period from 1996 where intangible assets were 'hidden' in offshore accounts.

The issue, which is known as 'transfer pricing' allows companies to reduce their tax liabilities by placing patents, trademarks and licenses in lower tax countries, no matter the area of affect.

This effective 'market' is thought to be worth around $15.5 bn annually but is becoming more contentious as governments crack down.

The share price of AstraZeneca corrected itself 1.21 pct following the announcement.

Last month, AstraZeneca announced 4 pct increase in FY revenue based on sales of Tropol XL (a cardiovascular drug that selectively inhibits the heart from overworking, and hence operates in High Blood Pressure sufferers), and an Influenza vaccine in USA.

The tax settlement will be paid in two installments £350m in March 2010, and £155m March next year.