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

Company: ANDINA BOTTLING CO INC
Filing Date: 2025-03-26
Form: 20-F
Item: Item 3
Chunk 25
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 or its bottling companies in Brazil, including our Brazilian subsidiaries.
RJR is party in tax proceedings in which the Brazilian federal tax authorities are charging Corporate Income Taxes (CIT), added by penalties and interest, involving an approximate total amount of R$1.06 billion. These proceedings result from the disallowance of expenses from the tax deduction of (i) goodwill paid and registered by RJR, mainly upon the acquisition of the investment in Companhia de Bebidas Ipiranga (Ipiranga) in 2013, under the ground that the “real acquirer or investor” was a company located abroad (and not directly RJR); and (ii) interest expenses incurred by RJR under a loan agreement executed with Andina Bottling Investments to finance part of the purchase price paid to sellers of Ipiranga, arguing that such expenses were “unnecessary” to RJR. These proceedings were recently examined by the Administrative Tax Court (CARF), second administrative level (appellate division of administrative court), which issued favorable decisions to RJR. CARF understood that the company complied with the legal requirements that authorize the goodwill deduction for tax purposes, and ordered the full cancelation of the debts charged by Brazilian federal tax authorities. The National Treasury Attorney’s Office (PGFN) was notified of these decisions and presented appeals which are currently under review by the Administrative Tax Court (CARF). We believe that the Brazilian tax authorities’ claims are without merit, as already recognized by administrative decisions issued by CARF. Our external Brazilian counsel has advised us that it believes that the likelihood of loss in these proceedings is classified as possible, mainly under the grounds that (i) the acquisition of Ipiranga was carried out between independent parties in accordance with the applicable law; (ii) all legal requirements established by the regime of Law N. 9,532/97 were observed; (iii) the goodwill registered by RJR was fully based on the expected future profitability of the acquired investment, which was demonstrated through technical valuation reports; (iv) there is no legal basis to support allegations of “real acquirer or investor” or other related grounds; and (v) the interest expenses incurred by RJR are normal and necessary expenses to its business activities and, therefore, should be qualified as deductible for tax purposes.

19

Risks Relating to Argentina
Our business operations in Argentina are dependent on economic conditions in Argentina.
Our operations in Argentina represented 9.5% and 17.1% of our assets as of