GlaxoSmithKline PLC (GSK) Monday said it has settled a long-runnning tax dispute with the U.S. Internal Revenue service through a $3.1 billion payment to the U.S. government agency.
The settlement covers the dispute for the 1989-2000 period, due to go to trial in February of next year, and also covers the subsequent 2001-05 period.
The settlement won't affect earnings or tax rate since the payment will be made from a GBP2.3 billion provision already set aside for the purpose.
GlaxoSmithKline said it was in the best interest of shareholders to reach the agreement with the U.S. tax authorities.
"We are very pleased with the settlement, given the risks and uncertanty of litigation," a company spokeswoman said.
The row with the U.S. tax authority related to the way GlaxoSmithKline booked some U.S. profits in the U.K., which has a lower rate of corporation tax.
At 1515 GMT, shares were up 9 pence, or 0.6%, to 1,478 pence.
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