The case arose from a dispute between Perrigo and the Revenue over the company’s 2013 sale of its 50 per cent stake in intellectual property relating to a medication used to treat multiple sclerosis and Crohn’s disease.

Perrigo treated the transaction in its corporation tax returns as part of its trade. The Revenue believes it should properly have been treated as a capital transaction, attracting tax at an effective rate of 33 per cent rather than 12.5 per cent.

In November 2018, the Revenue issued an amended assessment in respect of the accounting period from 1 January 2013 to 31 December 2013 in the sum of €1,636,047,645.

Although Perrigo appealed the notice of amended assessment to the Tax Appeal Commission (TAC), it also brought a judicial review claiming that, irrespective of the nature of the transaction, there was no legal entitlement on the part of the inspector to issue the assessment.

In a 155-page judgment handed down this morning, Mr Justice Denis McDonald said Perrigo had “failed to establish any basis to interfere with the assessment issued in respect of [the disputed transaction]”.

The judge added: “The question whether the disposal of the Tysabri IP constituted a trading or a capital transaction is a matter that will have to be resolved in due course before the TAC.”