If the United States hopes to stop companies from moving their tax bases overseas, then it must adopt a territorial tax system, Pfizer CEO Ian Read told CNBC.
A territorial tax system, such as the sort found in Hong Kong or France, only levies taxes on a company's domestic income but not its international dealings. Read said such a tax plan would allow jobs to come back into the United States, after many corporations have left.
Read also said a potential U.S. tax holiday to alleviate some of the competitive pressures in the current corporate environment would only be a temporary solution.
Pfizer CFO Frank D'Amelio, meanwhile, called a tax holiday "directionally correct."
Pfizer announced in May that it would not be making another offer for British drugmaker AstraZeneca after its £69 billion ($116 billion) bid was rejected. U.K. takeover rules state that Pfizer would not be allowed to make another offer for six months. Read declined to discuss the failed deal, citing British regulations.
"We continue to look at all opportunities for business development," he said.