Coca-Cola Co. said Friday it will pay $6 billion in back taxes and interest to the Internal Revenue Service while it appeals a final federal tax court decision in a case dating back 17 years.
The Atlanta beverage giant said it will continue to fight and believes it will win the legal dispute stemming from taxes and interest the IRS maintains the company owes from 2007, 2008 and 2009.
“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,” it said in a statement. Coca-Cola spokesperson Scott Leith declined additional comment to The Associated Press.
U.S. Tax Court Judge Albert Lauber on Friday issued a two-sentence decision and order ending his look at the case. The dispute reached court in December 2015, shortly after the company said it notified the IRS that it owed $3.3 billion more in federal taxes and interest for those three years.
In its Friday statement, Coca-Cola accused the IRS of changing how it let the company calculate U.S. income based on profits amounting to more than $9 billion from foreign licensees and affiliates.
An IRS spokesperson did not immediately respond Friday to a telephone message from AP about the case.
In a Securities and Exchange Commission filing in 2015, Coca-Cola said it had been following the same method to calculate its taxable U.S. income from foreign affiliates for nearly 30 years.
In a company quarterly report filed with SEC on Monday, which included guidance to investors, the company said it believes the IRS and Lauber “misinterpreted and misapplied the applicable regulations in reallocating income earned by the company’s foreign licensees.”
The publicly traded company said it expected that “some or all of (the $6 billion), plus accrued interest, would be refunded” if Coca-Cola wins its appeal. It has 90 days to file appeal documents.
Last week, the company raised its full-year sales guidance after reporting a stronger-than-expected second quarter, boosted by product price increases.
Source: finance.yahoo.com