Caterpillar avoided $2.4B in U.S. taxes, Senate report says

|About: Caterpillar Inc. (CAT)|By:, SA News Editor

Caterpillar (CAT) -1% AH after a new report from Sen. Carl Levin, chairman of the U.S. Senate Permanent Subcommittee on Investigation, says the company has avoided paying $2.4B in taxes by shifting billions of dollars in profits to a wholly owned Swiss affiliate.

The report concludes CAT shifted $8B in profits from its parts manufacturing division in the U.S. to Switzerland; CAT negotiated a tax rate of 4%-6% with Switzerland, whose federal statutory tax rate is typically 8.5%.

Levin says CAT is a prime example of a tax-avoidance strategy that costs the U.S. billions of dollars every year, although the subcommittee does not have the authority to conclude whether CAT broke any tax laws.

The committee will begin hearings on CAT's offshore tax strategies tomorrow.