Company: AKO-B
Filing Date: 2025-03-26
Form Type: 20-F
Source: 0001410578-25-000473
Chunk: 24

Company: ANDINA BOTTLING CO INC
Filing Date: 2025-03-26
Form: 20-F
Item: Item 3
Chunk 24
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) as of December 31, 2023.
Additionally, regarding the tax on income, the following other noteworthy laws have been recently approved and may impact the Company’s operations: (i) Law No. 15,079, dated December 27, 2024, which establishes the additional corporate tax on net income (CSLL) in the process of adapting Brazilian legislation to the Global Rules Against Base Erosion – GloBE Rules, and (ii) Law No. 14,596, dated June 14, 2023, which provides for transfer pricing rules related to the corporate income tax (IRPJ) and the social contribution on Net Income (CSLL).
Furthermore, there are plans to approve a second tax reform which, among other factors, would have an impact on the income tax to be paid by Andina on profits and dividends. The effects of the approved tax reform and any other changes that result from the enactment of additional tax reforms have not been, and cannot be, quantified. If the enacted measures result in increases in our overall tax burden, our overall financial performance will be negatively affected. In addition, the Brazilian beverage industry experiences unfair competition arising from tax evasion, which is primarily due to the high level of taxes on beverage products in Brazil. An increase in taxes may lead to an increase in tax evasion, which could result in unfair pricing practices in the industry.
Brazilian tax proceedings may result in a significant tax liability.
Our subsidiary Rio de Janeiro Refrescos Ltda. (“RJR”) is party in several tax proceedings in which the Brazilian federal tax authorities argue the alleged existence of liabilities associated with value added tax on industrialized products for an approximate total amount of R$3.51 billion. These proceedings are at different administrative as well as judicial procedural stages. We disagree with the Brazilian tax authorities’ position and believe that Rio de Janeiro Refrescos Ltda. is entitled to claim Imposto sobre Produtos Industrializados (IPI) tax credits in connection with its purchases of certain exempt raw materials from suppliers located in the Manaus Free Trade Zone. We believe that the Brazilian tax authorities’ claims are without merit. Our external Brazilian counsel has advised us that it believes that Rio de Janeiro Refrescos Ltda.’s likelihood of loss in most of these proceedings is classified as possible or remote. Despite the foregoing, the outcome of these claims is subject to uncertainty, and it is difficult to predict their final resolution or any other negative repercussions from this dispute with the Brazilian tax authorities to The Coca-Cola Company