Caterpillar defends taxes attacked by U.S. Senate Democrat
By Patrick Temple-West
WASHINGTON (Reuters) - Caterpillar Inc defended itself on Tuesday against accusations of offshore tax-dodging, telling a U.S. Senate panel that a low-tax unit the company set up years ago in Switzerland has not been challenged by U.S. tax authorities.
Executives from the world's largest maker of mining and construction equipment were hauled in front of the Senate Permanent Subcommittee on Investigations to answer to allegations made by the panel in a 99-page report.
Released on Monday, it said Caterpillar avoided paying $2.4 billion in U.S. taxes from 2000 through 2012 by moving profits from sales of replacement parts through the Swiss unit, a strategy sharply criticized by the panel's chairman.
Democratic Senator Carl Levin said the Swiss arrangement had no business purpose other than to dodge taxes. "The documents couldn't be clearer, it's a tax deal," Levin said at the hearing, the latest in a series on corporate tax avoidance.
Caterpillar executives said its tax strategies, related to a complex corporate restructuring that began in 1999, were legal and in the best interest of its shareholders.
"We remain convinced that the restructuring and subsequent transactions comply with the tax law," said Julie Lagacy, vice president of Caterpillar's finance services division.
The Internal Revenue Service thoroughly examined the Swiss structure, called "CSARL," but did not challenge its validity, Caterpillar said in a statement to Reuters.
"Caterpillar has not paid additional taxes to settle a dispute over the CSARL structure," the statement said. Continued...