Coca-Cola says will appeal US tax court penalty worth $6 bn

Agencies| New York, United States

The Daily Tribune - www.newsofbahrain.com   

Coca-Cola said Friday it plans to pay a tax penalty worth $6 billion while it pursues an appeal in a long-running dispute with the Internal Revenue Service.

"The company believes it will prevail on appeal," Coca-Cola said of a US tax court ruling dated July 31 that covered the years 2007, 2008 and 2009. The back taxes amount to $2.7 billion, which with interest makes the total owed "approximately $6.0 billion," the company said.

"The company looks forward to the opportunity to begin the appellate process and, as part of that process, will pay the agreed-upon liability and interest to the IRS," Coca-Cola said Friday, adding that it has 90 days to file a notice with the US Court of Appeals.

The case dates to 2015 when Coca-Cola received a notice from the IRS contesting the company's accounting of income from foreign affiliates over the need for "armslength" pricing of transactions with these entities, Coca-Cola said in a securities filing.

Following a November 2020 decision in which the US Tax Court ruled against Coca-Cola, the company set aside reserves of $438 million.