Coca-cola brand

Israel’s Tax Authority wants Coca-Cola to pay some 160 million shekels (45million dollars) in taxes on royalties.

The global beverage giant receives the royalties from its local franchise for use of the brand name in Israel, local media reported.

Three leading Israeli newspapers said the tax bill was based on royalties of about one billion shekels transferred in recent years to Coca-Cola from Central Bottling Co, the Israel franchiser of Coca-Cola.

The Tax Authority declined to comment and officials at Coca-Cola were unreachable outside of business hours.

Under a tax treaty between the U. S. and Israel, the taxation rate for royalties for use of a trademark is 10 per cent, but that rises to 15 per cent for industrial royalties.

Media said normally the tax would have been deducted at the source, but the tax authority could not do this because Coca-Cola did not have a local corporate presence.

The financial daily Calcalist said Coca-Cola retained Israeli law firm Goldfarb Seligman to handle the matter.

Goldfarb Seligman declined to comment.

Central Bottling is one of Israel’s largest food and drinks maker, with annual sales of about two billion shekels.

(Reuters/NAN)