On 2 June 2021, the Coca-Cola Company has requested the US Tax Court to reconsider a transfer pricing tax ruling that was given on 18 November 2020.
Upon examination of the company’s 2007-2009 returns, IRS found that the company’s methodology was inconsistent with the arm’s length principle because it over-compensated the supply points and under-compensated the company for the use of its intellectual property. Based on this, the US Tax Court ruled on November 18 that Coca-Cola’s US-based revenue should be increased by approximately $ 9 billion for the years 2007 to 2009 in a dispute over the appropriate royalties owned by its foreign-based licensees.
In a Motion for Reconsideration of findings or opinion filed on 2 June 2021, the Coca-Cola argued that “the IRS is trying to use a different tax calculation method to impose billions in additional taxes on Coca-Cola, which Coca-Cola is rightly entitled to and which the IRS audited and approved for over a decade before retroactively demanding Coca-Cola to use a new and different method for tax years long past. The attempt by the IRS is arbitrary, capricious and unconstitutional. “
The Coca-Cola also added that the US Tax Court has the opportunity to correct these fundamental errors now, and with the utmost respect, Coca-Cola asks the Court to reexamine its opinion in this nationally important, precedential tax case.
