Miller & Chevalier Wins Foreign Tax Credit Tax Court Case for Coca-Cola
Miller & Chevalier is pleased to announce that the U.S. Tax Court ruled in favor of firm client The Coca-Cola Company in The Coca-Cola Co. v. Commissioner, 149 T.C. 21. The Tax Court held that the Internal Revenue Service (IRS) was incorrect to deny the company more than $138 million in foreign tax credits from taxes paid by its Mexican branch to the Mexican government. The Tax Court held that the Mexican taxes were compulsory payments based on a reasonable interpretation and application of Mexican law and that The Coca-Cola Company exhausted all effective and practical remedies, including invoking competent authority procedures, to reduce its liability for Mexican tax. The foreign tax credit issue is part of the company's Tax Court case against the IRS concerning a $9.4 billion transfer-pricing adjustment related to its licensing of intangible property to foreign affiliates. Trial is set to begin March 5, 2018.