The notice stems from a 2007 to 2009 audit and involves taxes to be paid on foreign profits.
In a regulatory filing, Coca-Cola stated: “The company firmly believes that the assessments are without merit and plans to pursue all administrative and judicial remedies necessary to resolve this matter”.
The company said it had followed the methodology for the licenses outlined in a 1996 agreement with the IRS.
The maker of Sprite, Dasani, Powerade and different drinks stated the disagreement is over how a lot it ought to report as taxable revenue within the U.S. , in relation with licensing that permits its overseas associates to promote merchandise like delicate drink concentrates to bottlers abroad.
“They hardly ever get to court, because neither party wants to experience the hazards of litigation”, Willens said.
“The IRS now seeks to depart from this long-standing apply with a view to improve considerably the quantity of tax”, the corporate stated. As of now, Coca-Cola has not been hit with any penalties, and the company said it has requested a meeting with the tax agency’s chief counsel.
“The ultimate outcome of disputes of this nature is uncertain, and if the IRS were to prevail on its assertions, the assessed tax and deficiency interest could have a material adverse impact on the company’s financial position, results of operations or cash flows”, the company said in a statement, according to The Inquisitr. “Furthermore, it would be inappropriate for the Internal Revenue Service to provide comment on any real examples, hypothetical examples or suppositions regarding a taxpayer or taxpayers”.
Coca-Cola has been adept at whittling its tax bill compared to many companies, an analysis a year ago by the Atlanta Journal-Constitution of its and other big Georgia companies’ tax disclosures showed.
“Under USA law, companies owe the IRS up to 35 percent on profits they earn around the world”. The company has a market cap of $1,188 million and the number of outstanding shares have been calculated to be 7,141,000 shares.