WASHINGTON, April 1 Executives for Caterpillar
Inc will defend the company's offshore tax strategies at
a U.S. Senate hearing on Tuesday held by a panel known for
shedding light on corporate tax avoidance.
In a 99-page report released on Monday, the Senate the
Permanent Subcommittee on Investigations said Caterpillar
avoided paying $2.4 billion in U.S. taxes from 2000 through 2012
by moving profits from sales of replacement parts through a
low-tax unit it set up in Switzerland.
Democrat Senator Carl Levin, chairman of the subcommittee
and one of Capitol Hill's most dogged questioners, said on
Monday Caterpillar set up the Swiss structure for no other
reason than to avoid U.S. taxes.
Caterpillar, the world's largest mining and construction
equipment maker, said on Monday the Swiss structure is legal and
is a standard business move for many multinational companies.
"Caterpillar stands by this structure," said Julie Lagacy,
vice president of Caterpillar's finance services division,
according to prepared testimony released ahead of the hearing.
Along with three Caterpillar executives, representatives of
Big Four accounting firm PricewaterhouseCoopers LLP,
which advised Caterpillar on the restructuring, are expected to
"In the fantasy land that is international tax law, tax
lawyers waved a magic wand to make millions of dollars in the
U.S. taxes disappear," Levin said.
Levin's panel has previously held hearings on corporate tax
avoidance with executives from Apple Inc,
Hewlett-Packard Co and Microsoft Corp.
(Reporting by Patrick Temple-West; Editing by Lisa Shumaker)