2020-11-19 08:12

Coca-Cola Improperly Shifted Profits Abroad, Tax Court Rules hw8世界播



The Internal Revenue Service had been seeking more than $3.3 billion from Coca-Cola for the 2007 through 2009 tax years. hw8世界播

在2007至2009纳税年度,美国国税局(Internal Revenue Service)一直在寻求从可口可乐(Coca-Cola)那里获得超过33亿美元的资金hw8世界播

WASHINGTON— Coca-Cola Co. placed too much of its profit in its foreign operations instead of its higher-taxed domestic parent company, a U.S. Tax Court judge ruled Wednesday. hw8世界播

华盛顿--美国税务法院法官周三裁定,可口可乐公司(Coca-Cola Co.)将太多利润投入海外业务,而不是税收更高的国内母公司。hw8世界播

The court adopted most of the U.S. government’s main arguments, and the ruling marks a setback for the beverage giant’s international tax strategy. hw8世界播


The Internal Revenue Service had been seeking more than $3.3 billion for the tax years 2007 through 2009. The cost to Coca-Cola could be more if the government applies the same successful rationale to subsequent tax years. hw8世界播

美国国税局(Internal Revenue Service)在2007年至2009年的纳税年度一直在寻求超过33亿美元的收入。如果政府将同样的成功理由应用于随后的纳税年度,可口可乐的成本可能会更高。hw8世界播

Wednesday’s ruling doesn’t set a final amount that Coca-Cola will owe from 2007 to 2009. The company and the government must make further calculations to determine that. hw8世界播


A Coke spokesman didn’t immediately comment. The IRS typically doesn’t speak publicly about litigation. hw8世界播


The dispute stemmed from Coca-Cola’s subsidiaries in countries including Brazil, Ireland and Egypt. Those operations produce syrups and other ingredients for use in the company’s beverages. hw8世界播


Especially before the 2017 U.S. tax law cut the corporate tax rate, U.S. companies had an incentive to pack profits into low-tax countries and defer U.S. taxes on those profits rather than attribute earnings to the U.S. parent, which faced an immediate 35% rate. hw8世界播


Companies within a single corporate structure are supposed to allocate profits between parent and a foreign subsidiary based on what unrelated companies would do in an equivalent, arm’s length transaction. But there are plenty of gray areas, especially when companies profit from mobile, intangible assets like trademarks and patents. The IRS regularly engages in protracted legal fights with corporations over how those rules should apply in each situation. hw8世界播


In his ruling, Judge Albert Lauber noted that Coca-Cola’s foreign subsidiaries had few trademarks or intellectual property and had little discretion over marketing, strategy and other decisions controlled by U.S. executives. hw8世界播

法官阿尔伯特·劳伯(Albert Lauber)在裁决中指出,可口可乐的海外子公司几乎没有商标或知识产权,对美国高管控制的营销、战略和其他决定几乎没有自由裁量权。hw8世界播

Yet, he noted, some of them had profits far higher than the company as a whole, thanks to their arrangements with the parent company. And he rejected the arguments advanced by the company’s experts as unpersuasive. hw8世界播


“Why are the supply points, engaged as they are in routine contract manufacturing, the most profitable food and beverage companies in the world?” he wrote. “And why does their profitability dwarf that of [Coca-Cola], which owns the intangibles upon which the Company’s profitability depends?” hw8世界播


Coca-Cola had previously warned investors that the case could have a material adverse impact and has vowed to fight the IRS. It can appeal Wednesday’s ruling. hw8世界播


“The Company firmly believes that the IRS’ claims are without merit and is pursuing, and will continue to pursue, all available administrative and judicial remedies necessary to vigorously defend its position,” Coca-Cola said in a securities filing last month. hw8世界播


The company had argued that the IRS had blessed its profit split during an earlier dispute. But Judge Lauber rejected that argument, calling it “a formula to which the parties agreed in settling the dispute before them at that moment.” hw8世界播


The judge sided with Coca-Cola on one point about how its tax deficiency should be calculated. hw8世界播


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