Japanese drugmaker Takeda is facing a large tax bill from Ireland as an uncalculated repercussion of its acquisition of US-managed, Ireland-domiciled Shire at the end of 2018.

Tax authorities in Dublin are demanding the company pay an additional €398 million ($443 million) they say it owes on the $1.64 billion breakup fee AbbVie paid Shire in 2014 after pulling the plug on their $55 billion merger.

AbbVie called off the proposed £32 billion( at current exchange rates $41 billion) deal following the passage of new US rules on inverted mergers under US president Barack Obama. The company had planned the Shire takeover to reduce its own tax burden.

Takeda said earlier it did not expect an additional tax charge, even though, as US trade journals report, it had already received notification.

"The continued legal guidance and advice we have received is that we are not liable for the tax on the break fee under Irish law. We have appealed this assessment and the appeals process is continuing," a Takeda spokesperson told the journal FiercePharma.

Even if it does go through, the Irish tax bill is unlikely to impair the Japanese giant’s pretax profit if though analysts say it will reduce the company’s cash available to pay down debt. Currently, Takeda is trying to cut debt incurred in the transaction by shedding some of Shire’s noncore assets, including the dry eye drug Xiidra, which it has agreed to sell to Novartis for $3.4 billion upfront.

In an indication that its appetite for welcoming pharmaceutical companies seeking to ease their – in particular US – tax burden, Ireland has saddled newcomers with some unanticipated charges, reports say.

In late 2018, Irish revenue commissioners asked Perrigo to repay €1.64 (currently $1.8 billion) after determining that its subsidiary Elan had had miscalculated a tax rate related to its 2013 transaction with Biogen over multiple sclerosis drug Tysabri.

In late 2019, AbbVie tripped over a new Irish regulation in its planned $63 billion acquisition of Allergan, another US-managed drugmaker domiciled in the EU country. It now faces a 1% Irish stamp duty bill totaling €572 million ($637 million).