How Choosing the Right Printer Helps Small Businesses and Content Creators to Save Time, Maximise Productivity and Achieve GrowthRead more Eritrea: World Breastfeeding WeekRead more Eritrean community festival in Scandinavian countriesRead more IOM: Uptick in Migrants Heading Home as World Rebounds from COVID-19Read more Network International & Infobip to offer WhatsApp for Business Banking Services to Financial Institution Clients across AfricaRead more Ambassador Jacobson Visits Gondar in the Amhara Region to Show Continued U.S. Support for the Humanitarian and Development Needs of EthiopiansRead more Voluntary Repatriation of Refugees from Angola to DR Congo ResumesRead more Senegal and Mauritania Are Rich in Resources, Poor in Infrastructure, Now Is the Time to Change That Read more Madinat Jumeirah: Dubai’s Stunning Four Hotel Beach Resort Offers Unirvalled Benefits for Summer StaycationsRead more Measles: EU Provides €450,000 in Humanitarian Response to Measles Outbreaks in SomaliaRead more

US tax authority prevails in dispute with Coca-Cola

Print Friendly and PDF

Nov 20, 2020 - 03:21 AM

NEW YORK — A US court mostly sided with tax authorities in a dispute with Coca-Cola over how the soda giant reports income from some overseas markets, according to a ruling this week.

The US Tax Court decision Wednesday largely upheld the Internal Revenue Service’s arguments, concluding that the agency “did not abuse (its) discretion” in the case.

The dispute centers on how Coca-Cola estimates income between 2007 and 2009 tied to licensed foreign manufacturing affiliates in Brazil, Ireland and some other countries that have lower tax rates than the US.

The IRS sent a notice to Coca-Cola in 2015 stating that the company owed potentially $3.3 billion in taxes over the three-year period, plus interest.

The IRS has argued that Coca-Cola insufficiently accounted for the value of the company’s intangible property such as its brand, which are maintained by the parent company.

“The intangible property is extremely valuable,” the court wrote in summarizing the IRS stance. “Coca-Cola is the best known brand in the world, recognized by more of the planet’s 7.7 billion inhabitants than another English word but ‘OK.'”

Coca-Cola maintained that the company followed the methodology agreed in 1996. The soda giant had argued that the IRS wasn’t taking into account overseas marketing costs when calculating the tax liability.

Coca-Cola said it was “disappointed” with the decision and was weighing an appeal. “We intend to vigorously defend our position,” the company said.

Shares of Coca-Cola dipped 0.2 percent to $52.53 in early-afternoon trading.

  • bio
  • twitter
  • facebook
  • latest posts

LMBCBUSINESS.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.