Coca-Cola is one of the most recognized brands in the world. The multinational corporation, based in Atlanta, Georgia, has subsidiaries around the globe. In 2021, Coca-Cola lost a $3 billion lawsuit in Tax Court related to transfer pricing and its syrup subsidiaries. This case study examines the issue of transfer pricing for use in Advanced Accounting and Advanced Tax courses. It can also be used to apply ethical frameworks to accounting decisions. After completing this case, students will be able to explain why companies and tax jurisdictions care about transfer pricing, the alternatives available for setting transfer prices, and the importance of tax planning for multinational corporations. Students can also evaluate the ethical considerations associated with shifting profits to low-tax jurisdictions.

Keywords:
transfer pricing, international tax, consolidation, intercompany inventory transfers, related-party transactions, Tax Court, advanced accounting, ethics
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2022
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