18th August 2016
Tom Neff, International Tax Chair at RINA accountancy corporation in the US and MGI North America International Tax Practice Group lead, has published an article highlighting an ongoing dispute between Coca-Cola US and the IRS.
Relating to the IRS' calculations on transfer pricing for the drinks manufacturer to the company's affiliates in Ireland, Swaziland, Brazil, Mexico, Chile, Costa Rica and Egypt, the firm has been hit with a proposed $9.4 billion income tax adjustment.
Clarification needed on transfer pricing methodology
The IRS claims there were inconsistencies in the company's transfer pricing methodologies for the years 2007 to 2009 and this led to a statutory notice of deficiency from the IRS for $3.3 billion in September last year.
However, a central issue in the dispute is whether the IRS properly relied on the comparable profits method to allocate routine returns to foreign licensees and if an agreement between Coca-Cola licensees and their US parent signed in 1996 continues to apply.
You can read the full article HERE.
RINA accountancy corporation is a member of MGI North America and has offices across California, in Walnut Creek, Oakland and San Francisco, USA. The firm specialises in full service accounting and tax consultancy for its clients.
MGI Worldwide is a top 20 ranked global accounting network with some 5,000 independent auditors, accountants and tax experts in over 250 locations around the world.