U.S. Tax Court Enters Decision in Ongoing Dispute Between The Coca-Cola Company and the U.S. Internal Revenue Service
The U.S. Tax Court has entered a decision in the ongoing tax dispute between The Coca-Cola Company (KO) and the U.S. Internal Revenue Service. The decision reflects a liability of approximately $2.7 billion, with the total amount anticipated to be around $6.0 billion including interest. Coca-Cola strongly disagrees with the IRS and Tax Court's interpretation and application of regulations and plans to appeal the decision within the next 90 days to the U.S. Court of Appeals for the Eleventh Circuit.
The dispute originated in 2015 when the IRS sought $3.3 billion in additional federal income tax for 2007-2009, reallocating over $9 billion of income from foreign affiliates to the U.S. parent company. Coca-Cola believes it will prevail on appeal regarding issues raised in both the 2020 and 2023 Tax Court opinions. The company has provided guidance on potential outcomes in its SEC filings, including the Form 10-Q filed on July 29, 2024.
La Corte Tributaria degli Stati Uniti ha emesso una decisione nella controversia fiscale in corso tra The Coca-Cola Company (KO) e il Servizio delle Entrate degli Stati Uniti. La decisione riflette una responsabilità di circa 2,7 miliardi di dollari, con l'importo totale previsto intorno a 6,0 miliardi di dollari inclusi gli interessi. Coca-Cola è fortemente in disaccordo con l'interpretazione e l'applicazione delle normative da parte dell'IRS e della Corte Tributaria e prevede di fare appello alla decisione entro i prossimi 90 giorni alla Corte d'Appello degli Stati Uniti per l'Undicesimo Circuito.
La controversia è iniziata nel 2015 quando l'IRS ha richiesto 3,3 miliardi di dollari in ulteriore imposta federale sul reddito per il periodo 2007-2009, riallocando oltre 9 miliardi di dollari di reddito da affiliate estere alla società madre statunitense. Coca-Cola crede di prevalere in appello riguardo alle questioni sollevate sia nelle opinioni della Corte Tributaria del 2020 che del 2023. L’azienda ha fornito indicazioni sui possibili esiti nei suoi documenti SEC, incluso il modulo 10-Q presentato il 29 luglio 2024.
El Tribunal Fiscal de EE. UU. ha emitido una decisión en la disputa fiscal en curso entre The Coca-Cola Company (KO) y el Servicio de Impuestos Internos de EE. UU. La decisión refleja una responsabilidad de aproximadamente 2.7 mil millones de dólares, y se anticipa que el monto total sea de alrededor de 6.0 mil millones de dólares incluyendo intereses. Coca-Cola está en fuerte desacuerdo con la interpretación y aplicación de las regulaciones por parte del IRS y del Tribunal Fiscal, y planea apelar la decisión en los próximos 90 días ante el Tribunal de Apelaciones de EE. UU. para el Undécimo Circuito.
La disputa se originó en 2015 cuando el IRS buscó 3.3 mil millones de dólares en impuestos federales adicionales sobre la renta para los años 2007-2009, reubicando más de 9 mil millones de dólares de ingresos de afiliadas extranjeras a la empresa matriz estadounidense. Coca-Cola cree que prevalecerá en la apelación sobre los temas planteados en las opiniones del Tribunal Fiscal de 2020 y 2023. La compañía ha brindado orientación sobre los resultados potenciales en sus presentaciones ante la SEC, incluida la forma 10-Q presentada el 29 de julio de 2024.
미국 세무법원이 The Coca-Cola Company (KO)와 미국 국세청 간의 지속적인 세금 분쟁에 대한 결정을 내렸습니다. 이 결정은 약 27억 달러의 책임을 반영하며, 이자 포함 총액은 약 60억 달러에 이를 것으로 예상됩니다. 코카콜라는 IRS와 세무법원의 규정 해석 및 적용에 강하게 반대하며, 향후 90일 이내에 미국 제11 순회 항소 법원에 결정에 항소할 계획입니다.
이 분쟁은 2015년 국세청이 2007-2009년 기간에 대해 33억 달러의 추가 연방 소득세를 요구하면서 시작되었으며, 외국 자회사의 90억 달러 이상의 소득을 미국 모회사로 재배분했습니다. 코카콜라는 2020년 및 2023년 세무법원 의견에서 제기된 쟁점과 관련하여 항소에서 승소할 것이라고 믿고 있습니다. 이 회사는 2024년 7월 29일에 제출한 10-Q 형식을 포함하여 SEC 제출서류에서 잠재적인 결과에 대한 지침을 제공했습니다.
La Cour fiscale des États-Unis a rendu une décision dans le différend fiscal en cours entre The Coca-Cola Company (KO) et le Service des impôts internes des États-Unis. La décision fait état d'une responsabilité d'environ 2,7 milliards de dollars, avec un montant total anticipé d’environ 6,0 milliards de dollars y compris les intérêts. Coca-Cola n'est pas du tout d'accord avec l'interprétation et l'application des réglementations par l'IRS et la Cour fiscale et prévoit de faire appel de la décision dans les 90 jours à venir devant la Cour d'appel des États-Unis pour le onzième circuit.
Le différend a commencé en 2015 lorsque l'IRS a exigé 3,3 milliards de dollars d'impôt sur le revenu fédéral supplémentaire pour les années 2007-2009, en réaffectant plus de 9 milliards de dollars de revenus d'affiliées étrangères à la société mère américaine. Coca-Cola croit qu'elle va l'emporter en appel concernant les questions soulevées dans les avis de la Cour fiscale de 2020 et 2023. La société a fourni des directives sur les résultats potentiels dans ses dépôts à la SEC, y compris le formulaire 10-Q déposé le 29 juillet 2024.
Das US-Steuergericht hat einen Beschluss in dem laufenden Steuerstreit zwischen The Coca-Cola Company (KO) und dem US-amerikanischen Internal Revenue Service getroffen. Der Beschluss spiegelt eine Haftung von ungefähr 2,7 Milliarden Dollar wider, wobei der Gesamtbetrag voraussichtlich bei etwa 6,0 Milliarden Dollar liegen wird, einschließlich Zinsen. Coca-Cola ist mit der Auslegung und Anwendung der Vorschriften durch das IRS und das Steuergericht stark unzufrieden und plant, innerhalb der nächsten 90 Tage Berufung beim US-Berufungsgericht für den elften Bezirk einzulegen.
Der Streit begann im Jahr 2015, als das IRS 3,3 Milliarden Dollar an zusätzlicher Bundessteuer auf das Einkommen für 2007-2009 forderte und über 9 Milliarden Dollar an Einnahmen von ausländischen Tochtergesellschaften auf das US-Mutterunternehmen umverteilte. Coca-Cola ist zuversichtlich, in der Berufung in Bezug auf die in den Entscheidungen des Steuergerichts von 2020 und 2023 aufgeworfenen Fragen zu bestehen. Das Unternehmen hat in seinen SEC-Einreichungen, einschließlich des am 29. Juli 2024 eingereichten Formblatts 10-Q, Hinweise zu möglichen Ergebnissen gegeben.
- Coca-Cola maintains a strong belief in its position and plans to vigorously defend it on appeal
- The company has provided transparent guidance on potential outcomes in its SEC filings
- U.S. Tax Court decision reflects a liability of approximately $2.7 billion for Coca-Cola
- Total amount anticipated to be around $6.0 billion including interest
- Potential reallocation of over $9 billion of income from foreign affiliates to U.S. parent company
- Ongoing legal dispute may result in significant financial impact if appeal is unsuccessful
Insights
The U.S. Tax Court's decision in the ongoing dispute between The Coca-Cola Company and the IRS marks a significant development with substantial financial implications. The court's ruling imposes a liability of approximately
From a legal perspective, Coca-Cola's stance that the IRS and Tax Court have "misinterpreted and misapplied the applicable regulations" sets the stage for a complex appellate process. The company's decision to appeal to the U.S. Court of Appeals for the Eleventh Circuit within the 90-day window is a strategic move to challenge the Tax Court's interpretation of tax laws, particularly those governing multinational corporations and transfer pricing.
The case highlights the ongoing tension between multinational corporations and tax authorities over profit allocation and transfer pricing methodologies. Coca-Cola's argument that the IRS rejected a previously agreed-upon methodology without prior notice raises questions about the stability and predictability of tax agreements between corporations and the IRS. This case could potentially set a precedent for how such disputes are handled in the future, affecting other multinational companies' tax strategies and their relationships with tax authorities.
The Tax Court's decision presents a significant financial challenge for Coca-Cola. The potential
As of their latest financial reports, Coca-Cola maintains a strong balance sheet with substantial cash reserves. The company's global operations and diverse revenue streams provide a buffer against such financial shocks. Nevertheless, investors should closely monitor how this potential liability might affect future dividend payments, share buybacks, or investment in growth initiatives.
From a market perspective, the uncertainty surrounding the appeal process could create short-term volatility in Coca-Cola's stock price. However, the company's proactive approach in providing guidance on potential outcomes demonstrates transparency, which may help mitigate negative market reactions.
Long-term investors should consider the broader implications of this case on Coca-Cola's global tax strategy. If the company loses the appeal, it may need to restructure its international operations and transfer pricing policies, potentially affecting its effective tax rate and global profitability in the future. Conversely, a successful appeal could reinforce the company's existing tax strategies and potentially benefit other multinationals facing similar scrutiny.
Coca-Cola to Move Forward with Appeal
Coca-Cola strongly believes the IRS and the Tax Court misinterpreted and misapplied the applicable regulations involved in the case and will vigorously defend its position on appeal. The company has 90 days to file a notice of appeal to the
On Sept. 17, 2015, the company received a notice from the IRS seeking approximately
On Oct. 15, 2015, the IRS designated this matter for litigation, precluding the company from any, and all, alternative means of resolution other than going to court. On November 18, 2020, the Tax Court issued an opinion in which it predominantly sided with the IRS. On Nov. 8, 2023, the Tax Court issued a second related opinion also siding with the IRS on the remaining issue.
The company believes it will prevail on appeal with respect to the issues raised in both the 2020 and 2023 Tax Court opinions. In line with the company’s goal to be as transparent as possible, the company has also provided guidance on the potential outcome should it not to be successful on appeal. This guidance and other details about the tax case are available in the Company’s Securities and Exchange Commission (“SEC”) filings, including the Form 10-Q filed on July 29, 2024.
The company continues to believe it will prevail in the case and will continue to vigorously defend its position.
FORWARD LOOKING STATEMENTS
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About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is a total beverage company with products sold in more than 200 countries and territories. Our company’s purpose is to refresh the world and make a difference. We sell multiple billion-dollar brands across several beverage categories worldwide. Our portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Our water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa,
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Investors and Analysts: Robin Halpern, koinvestorrelations@coca-cola.com
Media: Scott Leith, sleith@coca-cola.com
Source: The Coca-Cola Company
FAQ
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