A judicial review of a decision by Revenue to issue pharmaceutical company Perrigo with a tax bill for €1.64bn will not now formally begin until tomorrow.

It follows a decision to hold the hearing remotely due to concerns about the capacity of the court room and the need to limit the numbers attending.

This afternoon, barristers for both sides said their clients had agreed that the hearing could take place remotely and it will now begin online at 11:15 tomorrow morning.

Earlier Mr Justice McDonald had questioned why the case could not be heard remotely, after more people arrived for the start of it than considered safe under a Covid-19 health risk assessment of the room.

The judge said he could not see why the case needed to be heard in a physical courtroom as it is based on paper and submissions with no oral evidence, and he could not see how that could not be carried out remotely. 

He said the public has a right to hear what happens in court and the most appropriate mechanism to hear this case would be by remote hearing.

Mr Justice McDonald said all those present would technically be considered to be close contacts for the purposes of Covid-19 contact tracing if they spent two hours in the court room together.

He said he therefore questioned the advisability of proceeding with an eight day case in those circumstances.

The judge added that other cases like it had been successfully held remotely.

Legal representatives of both Perrigo and Revenue expressed reservations about proceeding with a remote hearing.

But they said they would take instructions from their clients on the matter, who agreed it could take place remotely.

The judicial review is of a decision by Revenue to issue a tax bill of 1.64bn euro to pharmaceutical company Perrigo two years ago.

Perrigo is seeking to have the tax assessment quashed, as it claims it is in breach of the public law.

The case focuses on what Revenue claims was the underpayment of tax arising from the sale by drug company Elan of its multiple sclerosis drug Tysabri to Biogen in 2013.

Eight months after that disposal, in December 2013, Perrigo bought Elan.

Revenue subsequently determined there was a tax issue arising from the the Tysabri deal late in 2018 and issued a bill to Perrigo of €1.64bn.

Tysabri was bought by Biogen through a combination of an up-front sum and a promise of future royalty payments that were dependent on the level of sales of the drug.

In it is ruling, Revenue found that those royalty payments should have been treated as a chargeable gain and taxed at 33%.

However, Perrigo instead classed them as trading income and paid 12.5% corporation tax on them.

Perrigo claims the Revenue treatment of Elan's tax returns over two decades meant it had a "legitimate expectation" as a taxpayer that it should be able to treat the revenue from the Tysabri sale as trading income.

It is therefore seeking to have the tax assessment quashed, as it claims it is in breach of the public law.

Revenue intends to strongly defend its decision.