Business
Coca-Cola battles IRS in federal appeals court with $20 billion at stake
SlateStone Wealth chief market strategist Kenny Polcari discusses whether investors are too dependent on AI, Space X’s IPO and his outlook for the markets on ‘Varney & Co.’
Coca-Cola and the IRS are heading to court with $20 billion on the line amid a years-long dispute over the beverage company’s reporting of profits made in the U.S. and overseas.
The soda giant is taking its case to a federal appeals court in Miami as it looks to resolve a tax liability stemming from how Coca-Cola and its foreign subsidiaries disclosed profits from 2007 to 2009 using an accounting practice known as transfer pricing.
The case centers on an agreement between the company and the IRS from 1996 about how the company would report foreign profits, as Coca-Cola’s U.S. corporation licenses its intellectual property – ranging from recipes, brand names and trademarks – to foreign subsidiaries that manufacture concentrates used to make its beverages for foreign markets.
Coca-Cola argues that it structured its operations to comply with the 1996 agreement using a “10-50-50” method that lets foreign suppliers keep 10% of the gross sales, with the U.S. parent company and foreign subsidiary splitting the remaining profits.
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Coca-Cola argues the IRS backtracked on an agreement it reached with the company in 1996. (Rachel Wolf/Fox News Digital)
“Far from seeking to evade its tax obligations, Coca-Cola carefully structured its operations to adhere to a method that the IRS had repeatedly blessed,” the company said in a court filing, per The Wall Street Journal.
The outlet reported that the IRS counters that the 1996 agreement was retroactive to 1987 but didn’t apply to future years, and that it only offered protection from penalties for the use of the 10-50-50 method as opposed to immunity.
The IRS said in its own filing that the “combination of two non-promises does not add up to a promise, as Coca-Cola wishes.”
COCA-COLA’S YELLOW CAPS ARE BACK – WHAT THEY MEAN AND WHY THEY’RE COMPARED TO MEXICAN COKE
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KO | THE COCA-COLA CO. | 79.53 | +0.14 | +0.18% |
While the company’s tax filings from 2007 to 2009 were the focus of the IRS’ initial case, Coca-Cola has continued to use the accounting method as the legal dispute has played out.
The IRS prevailed over Coca-Cola in a Tax Court ruling in 2020, which resulted in the company paying $6 billion in taxes and interest as the judge ruled the parent company’s deals with foreign subsidiaries were structured improperly to keep profits overseas in lower tax jurisdictions.
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The IRS argues Coca-Cola’s international accounting practices were flawed and not approved. (Kayla Bartkowski/Getty Images)
That money could go back to Coca-Cola with interest if the company prevails with its appeal, though it could face an even larger tax bill if it’s defeated in court due to the ongoing use of the tool.
Coca-Cola would owe an estimated $14 billion in taxes and interest for the 2010 through 2025 tax years, bringing the total to $20 billion if it loses its appeal against the IRS.
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The Journal noted that the potential $14 billion liability could cause Coca-Cola to borrow to pay the IRS, as the amount exceeds the cash it has on hand – though analysts have said the company is emphasizing it has the needed liquidity to cover the bill and maintain its dividend for investors.
Coca-Cola declined to comment. FOX Business reached out to the IRS for comment.
Business
Incorporated in 2020, Waterways Leisure Tourism currently operates a single cruise vessel, the ‘MV Empress‘, with a passenger capacity of 2,005. It has acquired two new cruise vessels on lease, which will be introduced in the current and next fiscal years with a combined capacity of up to 3,940 guests. The company outsources maintenance, operations and management of gaming arcade, spa, and casino to third-party providers, with nearly 21% of its revenue allocated to these services. Average ticket price grew 9% annually to ₹10,979.9 and revenue per passenger rose 7% annually to ₹12,036.4 between FY24-26.
AgenciesHeadwinds The cruise operator is expanding fleet, but weak cash flows, margin contraction and regional conflicts areas of concern
Financials
Revenue declined 2% year-on-year to ₹579.7 crore while net profit tumbled 69% to ₹52.1 crore in FY26. Operating margin before depreciation and amortisation contracted to 20% from 36% during the period. Over 90% of revenue comes from cruise ticket sales. Passenger load factor moderated to 85% in FY26 after improving from 78.5% in FY24 to 91.6% in FY25. Since fuel costs account for 17-20% of revenue, fluctuations in fuel prices may pressure margins, as the company may not be able to fully pass on increases through ticket pricing.Valuation
Considering the post-IPO equity and net profit for FY26, the company seeks a steep price-earnings (P/E) multiple of up to 112. It does not have a direct Indian-listed peer. The company has given a mix of hotel and entertainment peers, which have P/E between five and 41, which includes companies such as Taj GVK Hotels & Resorts, Juniper Hotels, Samhi Hotels, Lemon Tree Hotels and Wonderla Holidays.
Only shareholders who hold the shares in their demat accounts as of Wednesday will be eligible to receive the bonus shares. Due to SEBI’s T+1 settlement norm, investors must purchase the company’s shares at least one trading day before the record date so they are credited to their demat accounts by that date and qualify for the corporate action. This effectively makes today the final day for investors to buy the shares to be eligible for the bonus issue.
All about Kotyark Industries bonus issue
Kotyark Industries earlier this year announced its plan to issue 10.28 crore bonus shares with a face value of Rs 10 each. Every shareholder who owns one share of the company as on the record date will get 10 bonus shares as part of the offer.
This marks the company’s first ever bonus issue. Kotyark Industries is engaged in the manufacturing of biodiesel and its by-products, and is one of the key players across Rajasthan. The company focuses on green energy and sustainable development of renewable resources (biofuel) through the adoption of environmentally friendly technology.
Also read: Dividends & bonus issues | LIC, Asian Paints among 35 stocks turning ex-record date this week. How many do you own?Kotyark Industries shares rallied around 12% on Monday. The stock has gained 9% in one week and is overall up 87% in 2026 so far. The shares of the company jumped 35% in one year but fell nearly 6% in three years. It has a market capitalisation of Rs 458 crore.
All about ZF Commercial Vehicle Control Systems bonus issue
ZF Commercial Vehicle Control Systems India announced in May that it plans to issue bonus shares in the ratio of 5:1, which means that shareholders will get 5 bonus shares for every share held in the company as on the record date. This is the first bonus issue announced by the company.
ZF Commercial Vehicle Control Systems India is associated with advanced and conventional braking systems, along with related air assisted technologies and systems in India. The Chennai-headquartered company has five manufacturing facilities, an advanced technology development center, a vehicle testing facility and a nation-wide aftermarket distribution and services network.
The shares of the company declined over 1% on Monday, but gained over 3% in one week, 5% in one month and 6% in 2026 so far. In the longer term, the stock jumped 18% in one year, 27% in three years and 124% in five years. The company has a market capitalisation of nearly Rs 30,000 crore.
Also read: Bajaj Auto nears record date for Rs 5,633 crore share buyback at 19% premium. Should you participate?(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Steve Allen/Stockbyte via Getty Images
By Jennifer Nash
Our global markets watchlist tracks nine prominent indexes from economies around the world. The list includes the S&P 500 from the United States, TSX from Canada, the FTSE 100 from England, the DAXK from Germany, the
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Fuel-reduction strategies in the state’s South West continue to be questioned from a variety of perspectives.
The BSE SME issue will close on June 25, while the shares are scheduled to list on July 1. The IPO is priced at Rs 196 per share and comprises a combination of a fresh issue worth Rs 26.65 crore and an offer for sale (OFS) of Rs 5.34 crore, taking the total issue size to Rs 31.99 crore.
Retail investors can bid for a minimum of 1,200 shares, requiring an investment of Rs 2.35 lakh.
Aluminium railing manufacturer
Incorporated in 2021, Jivial Industries manufactures aluminium railing systems and architectural fixtures used in residential and commercial buildings. Its product portfolio includes handrails, spigots, brackets, locks, endcaps, bends, jointers and other aluminium fittings used for balconies, glass partitions, façades and viewing windows.
The company caters to construction firms, architects, interior designers, fabricators and glass solution providers across India, with a strong presence in Gujarat, Maharashtra and Chhattisgarh. It also exports a small portion of its products to Oman.
Jivial operates a manufacturing facility in Rajkot and plans to establish a second unit to expand production capacity and strengthen backward integration through aluminium extrusion.
Use of IPO proceeds
The company plans to utilise the fresh issue proceeds to purchase new machinery, renovate its manufacturing facility, meet issue-related expenses and for general corporate purposes.
Financial performance
For the nine months ended December 2025, Jivial Industries reported revenue of Rs 12.2 crore and profit after tax of Rs 2.95 crore. For FY25, the company posted revenue of Rs 12.07 crore and net profit of Rs 2.97 crore, while maintaining a relatively low debt level of Rs 1.23 crore.
With the GMP at zero, the grey market is not pricing in listing gains at present. Investors may therefore focus on the company’s long-term growth prospects and execution of its expansion plans rather than short-term listing expectations.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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