Updated
Updated · Fox Business · Jun 22
Coca-Cola Appeals $20 Billion IRS Transfer-Pricing Ruling After $6 Billion Tax Court Loss
Updated
Updated · Fox Business · Jun 22

Coca-Cola Appeals $20 Billion IRS Transfer-Pricing Ruling After $6 Billion Tax Court Loss

3 articles · Updated · Fox Business · Jun 22

Summary

  • $20 billion is at stake as Coca-Cola takes its transfer-pricing fight with the IRS to a federal appeals court in Miami, challenging a 2020 Tax Court defeat.
  • The dispute turns on whether a 1996 IRS agreement let Coca-Cola keep using its “10-50-50” profit-split method for foreign subsidiaries from 2007 to 2009 and beyond.
  • $6 billion in taxes and interest has already been paid under the Tax Court ruling; Coca-Cola could recover that money with interest if it wins the appeal.
  • $14 billion more could be owed for 2010 through 2025 because Coca-Cola kept using the method, a liability analysts say may require borrowing even as the company says it can protect liquidity and its dividend.

Insights

How could a 2024 Supreme Court ruling help Coca-Cola win its $20 billion tax battle?
With a potential $20 billion tax bill, is Coca-Cola's famous dividend at risk?

Coca-Cola’s $20 Billion IRS Showdown: The Landmark Transfer Pricing Appeal Reshaping Global Tax Strategy

Overview

The Coca-Cola Company is currently appealing a major Tax Court decision at the Eleventh Circuit, following the court’s August 2, 2024 ruling that sided with the IRS on $9 billion in transfer pricing adjustments and upheld key IRS regulations. This high-stakes dispute centers on complex legal and financial questions, with billions of dollars at risk for Coca-Cola. The outcome is being closely watched by the corporate world, as it could set a powerful precedent for how US-based multinational companies are taxed on profits from their foreign subsidiaries, potentially impacting many businesses beyond Coca-Cola.

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