Pharma Companies Face a Wave of Supplemental Tax Payments Under Golden Tax Phase IV: BeiGene Pays S$446 Million

After the market close on June 26, BeiGene, Ltd. (688235.SH) announced that one of its domestic wholly owned subsidiaries had received notice from the local tax authority. The company agreed to make several adjustments to previously submitted tax returns and has already reached confirmation with the tax authority on the related tax matters. It will promptly pay back taxes and late fees totaling about S$446 million as required. That amount is roughly 30% of its 2025 net profit.

According to BeiGene's 2025 annual report, the company posted revenue of S$38.225 billion in 2025, up 40.46% year on year; net profit attributable to shareholders of the parent company was S$1.461 billion, turning from a loss of S$4.978 billion; and net profit after extraordinary items was S$1.420 billion, also turning from a loss of S$5.379 billion.

BeiGene told the media that it had recently received notice from the local tax authority regarding the relevant tax matters, made several adjustments to earlier tax returns, had fully and professionally communicated the differences between technical determinations and tax-accounting treatment with the authority, and will make the payment as required. This matter does not involve administrative penalties. Based on the relevant provisions of the Accounting Standards for Business Enterprises, the matter does not constitute a prior-period accounting error and does not require retrospective adjustment of prior financial data.

The company expects the amount to be recorded in 2026 current-period profit or loss, and the specific impact on net profit will be subject to the audited financial statements. The matter is not expected to have a material adverse effect on the company's financial position, going-concern ability, or normal operations.

Multiple Companies Have Announced Large Supplemental Tax Payments This Year

In addition to BeiGene, many other pharma companies have also issued announcements this year regarding supplemental tax payments or tax-related adjustments. On May 20, Aier Eye Hospital Group (300015.SZ) said that after conducting a self-inspection of tax-related matters in line with legal and regulatory requirements, it had determined that it needed to pay S$348 million in taxes and S$176 million in late fees, for a combined total of S$524 million.

On January 1, China National Medicines Corp. (600056.SH) announced that its wholly owned subsidiaries Sanyang Pharmaceutical and Kangli Pharmaceutical had received tax notices requiring a combined payment of about S$65.2178 million in taxes and late fees. Sanyang Pharmaceutical had to pay S$21.4862 million in taxes and S$10.7429 million in late fees; Kangli Pharmaceutical had to pay S$21.2826 million in taxes and S$11.7061 million in late fees.

In addition, companies such as Jia Shi Tang (002462.SZ), Blaupunkt Medical (002382.SZ), and Jointown Pharmaceutical Group (000950.SZ) have also announced supplemental tax payments.

According to an incomplete Wind Data tally, as of June 25 at least 80 listed companies had disclosed announcements related to supplemental tax payments or tax adjustments this year, close to the 89 announced for all of 2025. The total amount involved in back taxes, late fees, and fines has exceeded S$6 billion.

Lawyer's View: Golden Tax Phase IV Is Driving a Concentrated Settlement of Historical Risks

Gui Xin, a lawyer and initiator of the Tianmu Venture Capital ecosystem and senior partner at Taihe Law Firm (Shanghai), said the recent wave of supplemental tax payments by pharma listed companies such as BeiGene and Aier Eye Hospital after annual reports is essentially the result of Golden Tax Phase IV's strict oversight. The pharma industry has high R&D spending, diversified business models, and historical compliance issues stemming from tax incentives (such as high-tech status and extra R&D deductions), accounting-tax differences, and related-party transactions.

He pointed out that supplemental tax payments often happen after annual reports. On one hand, companies complete final tax settlements and audits before proactively conducting tax self-checks to avoid inspection penalties. On the other hand, this also reflects the difference between auditing, which focuses on financial truthfulness, and tax authorities, which focus on tax law application. Supplemental tax payments usually stem from policy interpretation adjustments rather than financial fraud, and are a normal part of capital-market tax compliance and self-correction.

Gui further believes that the frequent appearance of large supplemental tax payments in pharma and other sectors this year, and the fact that the amounts far exceed previous years, is mainly due to the full rollout of Golden Tax Phase IV, which enables data cross-checking across multiple departments. Combined with tighter scrutiny of tax incentives and the implementation of the Value-Added Tax Law, companies are being forced to settle historical tax risks accumulated over the past five or even ten years in one go.

At the same time, listed companies, in order to avoid heavy fines and disclosure risks, are proactively "checking for landmines" and announcing them after annual report audits and tax settlement. This combination of technical pressure, tighter policies, and proactive compliance has caused hidden legacy problems from previous years to erupt in 2026, creating what looks like a sudden wave of supplemental tax payments.

Will This Tax Wave Be One-Off or Become the Norm?

Asked whether this round of supplemental tax payments only concerns this year or will become a normal pattern, Gui said it is not limited to 2026. His logic has two layers: the large supplemental payments clustered in 2026 are mainly a one-time concentrated settlement of multi-year historical issues, usually reaching back three to five years. As proactive self-inspections continue, these massive retroactive payments should gradually decline over the next one to two years.

However, routine tax adjustments will remain for the long term. Golden Tax Phase IV's "tax governance through data" is permanent infrastructure, and tighter supervision of tax incentives, including annual reviews for high-tech status and real-time checks on extra R&D deductions, will become the norm. In the future, companies may still face supplemental taxes each year during annual settlements due to finer policy interpretation or related-party pricing adjustments, but the amounts will return to normal levels rather than trigger huge cleanups of old accounts. Tax compliance will shift from occasional "landmine clearing" to a daily rigid operating cost for businesses.