Beverage giant Coca-Cola agreed to pay $6 billion to the Internal Revenue Service (IRS) in back taxes after a U.S. Tax Court judge ruled against the company to bring an end to a case that has been going on since 2015.
IRS argued that Coca-Cola failed to pay around $2.7 billion in taxes, with the figure coming at $6 billion in interests, for 2007, 2008, and 2009, after attributing a larger portion of the profits to its subsidiaries overseas. The company, on the other hand, argued that it filed its tax for those years using the same method it had used for calculation for almost three decades.
In its quarterly report shared earlier this week, Coca-Cola stated that it believes the IRS and Tax Court judge “misinterpreted and misapplied the applicable regulations in reallocating income earned by the company’s foreign licensees.”
Now, the soda maker announced on Friday that it would pay the back taxes it owns, but it also confirmed it intends to appeal the decision. In case the appeal is successful, it expects all of the $6 billion alongside interest to be refunded.
“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 to the IRS,” Coca-Cola said in a statement.