* Caterpillar Swiss deal was 'tax avoidance' -senator
* Swiss structure not challenged by IRS -Caterpillar
(Recasts lede; adds Lagacy, Levin quotes and share price)
By Patrick Temple-West
WASHINGTON, April 1 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.
The IRS declined to comment on Caterpillar's taxes.
Shares of Caterpillar rose 44 cents on Tuesday to close at
$99.81, in line with broader stock market gains.
PWC EXECS APPEAR
Along with three Caterpillar executives, representatives of
Big Four accounting firm PricewaterhouseCoopers LLP,
defended the tax advice it gave Caterpillar on its Swiss deal.
The hearing marked the latest foray by Congress into
corporate tax management issues, with Democrats largely scolding
corporate managers and some Republicans coming to their aid.
Republican senators said at the hearing Caterpillar and
other multinational companies should not be blamed for shifting
profits abroad to avoid the 35-percent U.S. corporate tax rate.
"We've got the wrong people on trial here. The tax code
needs to be on trial here," said Republican Rand Paul, a
libertarian and potential 2016 White House contender.
Past subcommittee hearings have focused on the tax avoidance
strategies of Apple Inc, Hewlett-Packard Co and
(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh,