Pfizer Inc. told investors it had a 25.5% global tax rate in 2014. The company could have cut that rate to 7.5% if it reported its foreign earnings the way most U.S. corporations do.

The pharmaceutical company, which is exploring a merger with Allergan PLC that could put the combined company’s legal address outside the U.S., has been complaining that the U.S. tax system hobbles its ability to compete globally. But Pfizer’s accounting methods raise its reported tax rate, without increasing the actual taxes the company pays....