Caterpillar Inc. Avoided $2.4 Billion in U.S. Taxes, Senate Report Says
Source: ABC News
Caterpillar Inc. Avoided $2.4 Billion in U.S. Taxes, Senate Report Says
By Arlette Saenz
@ArletteSaenz
Mar 31, 2014 5:07pm
WASHINGTON — Caterpillar Inc., a U.S. manufacturer of construction equipment, has avoided paying $2.4 billion in taxes by shifting billions of dollars in profits to a wholly owned Swiss affiliate, a new report from Sen. Carl Levin, chairman of the U.S. Senate Permanent Subcommittee on Investigation, says.
The report, which was compiled by the subcommittee’s majority staff, concluded that Caterpillar shifted $8 billion in profits from its parts manufacturing division in the U.S. to Switzerland. Caterpillar negotiated a tax rate of 4 percent to 6 percent with Switzerland, whose federal statutory tax rate is typically 8.5 percent.
“In the fantasyland of international tax, Caterpillar waved a magic wand to make billions of dollars in U.S. taxes disappear,” Levin said today. “This is a prime example of a tax avoided strategy that cost the U.S. Treasury billions of dollars.”
Caterpillar shifted 85 percent of its profits from its replacement parts division to a related Swiss affiliate, while 15 percent of the profits remained in the United States, where 70 percent of the company’s third party manufactured parts that are sold abroad are manufactured, stored and shipped.
Read more: http://abcnews.go.com/blogs/politics/2014/03/caterpillar-inc-avoided-2-4-billion-in-u-s-taxes-senate-report-says/
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