Caterpillar’s $2 billion tax fight with the IRS could change how US companies do business

Caterpillar Inc. has long used a subsidiary in Geneva, Switzerland, called Caterpillar SARL, to process sales along with profits for international orders, along with the IRS wants the heavy-machinery maker to pay a $2 billion tax bill on that will business, according to The Wall Street Journal.

Although the company maintains that will its Swiss strategy, which results in an effective tax rate there of as low as 4 percent, is usually legal, some Caterpillar employees have questioned the practice, which began in 1999, the Journal reports.

No civil or criminal charges have been filed, along having a Caterpillar spokeswoman told the Journal that will the company is usually “within the process of responding to the government’s concerns.”

Federal officials raided Caterpillar’s offices in March, along with the outcome of the investigation could influence different U.S. companies’ tax strategies. Sweeping fresh tax law took effect Monday, partially aimed at persuading American companies to bring back their overseas cash holdings.

Read the Journal’s full report on Caterpillar.

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