Caterpillar Dodged Tax, Senate Inquiry Finds

Swiss move helped company avoid paying $2.4 billion in U.S. taxes, according to report.

Caterpillar Inc. avoided paying $2.4 billion in U.S. taxes by shifting profits from a parts business to a subsidiary in Switzerland, according to a report released today by a Senate investigative committee.

The world’s largest maker of construction and mining equipment made a “paper change” starting in 1999 that made the profits of the subsidiary subject to a Swiss tax rate as low as 4 percent, said Senator Carl Levin, a Michigan Democrat who will question company executives at a hearing tomorrow.

‘Profit Machine’

The company tries to ensure that specialized parts are available around the world when needed and the report says the company has called the parts business a “perpetual profit machine” that is steady even as new machine sales slow in an economic downturn.

Page 2 of 2

Copyright 2016 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments

Advertisement. Closing in 15 seconds.