Coca-Cola Fights Tax Claim on Franchise Royalties

YERUSHALAYIM -
Boxed Coca-Cola bottles lined up at the Coca Cola factory in Bnei Brak. (Yaakov Naumi/Flash90)

The Coca-Cola Company is fighting an Israel Tax Authority claim on royalties for use of its brand name by the Coca-Cola franchise in Israel, Globes reported on Wednesday.

At issue is a 160 million shekel ($44.7 million) tax for 2010-2011.

The Tax Authority and the beverage company have been tussling over the payment for some time. The Authority rejected an objection filed by the company, which says it will appeal in the Tel Aviv District Court, for which purpose it has hired the law firm Goldfarb Seligman & Co.

The Authority argues that according to the U.S.–Israel taxation treaty, liability is determined by “place of use.” Since the place where the right of use of the brand is in Israel, the local authorities are entitled to their share.