Ross played down the prospect of an agreement being reached at the G-20 meeting in Osaka on June 28-29.Paris Airshowread more
Boeing is scrambling to restore confidence in the 737 Max from regulators, customers and the flying public.Paris Airshowread more
Heavy rains caused unprecedented delays in planting this year and contributed to record floods across the central United States.Agricultureread more
Huawei CEO and founder Ren Zhengfei said that the Chinese tech company will report revenues of around $100 billion in 2019 and 2020, which would be flat growth versus 2018.Technologyread more
Bitcoin leapt across the $9,000 mark on Sunday, boosted by reports that Facebook is soon set to launch its own cryptocurrency.Cryptocurrencyread more
Although Cook did not mention companies by name, his commencement speech in Silicon Valley's backyard mentioned data breaches, privacy violations, and even made reference to...Technologyread more
In the survey, 66% of Democratic primary voters say they'd be enthusiastic or comfortable about Biden as their nominee to take on President Trump in the 2020 election. Just...Politicsread more
Target's registers were down on Saturday for several hours preventing customers from checking out.Retailread more
Organizers claimed that nearly 2 million Hong Kong protesters took to the streets Sunday in a rally to demand the city's top official resign a day after she suspended — but...China Politicsread more
African swine fever, which has already ravaged pig herds in China and pushed up food prices there, could also drive up inflation in the other emerging markets, according to...Asia Economyread more
Consumer goods giant Unilever has taken the unusual step of having some of its marketing staff read their own DNA profiles to see whether finding out about their heritage has...Marketing.Media.Moneyread more
Heavy equipment giant Caterpillar shifted $8 billion in profits to an offshore Swiss affiliate over the last decade, and avoided paying $2.4 billion in U.S. taxes, according to a new report from the Senate Permanent Subcommittee on Investigations.
The subcommittee chairman, Sen. Carl Levin, D-Mich., said: "Caterpillar is an American success story that produces phenomenal industrial machines, but it is also a member of the corporate profit shifting club—that has shifted billions in profits offshore to avoid paying U.S. taxes."
Starting in 1999, through 2012, Caterpillar paid PricewaterhouseCoopers more than $55 million to develop and implement a tax strategy built around redirecting to Switzerland its taxable profits from sales of Caterpillar-branded replacement parts, according to the report.
In exchange for a small royalty, Caterpillar transferred rights and profits from its international parts distribution business to a wholly controlled Swiss affiliate called CSARL, according to the subcommittee report.
On Tuesday, officials from the Peoria, Ill.-based maker of construction and mining equipment, including its chief tax officer, are scheduled to appear before the subcommittee—to explain those strategies designed to shrink its tax bills.
"Caterpillar takes very seriously its obligation to follow tax law and pay what it owes," Julie Lagacy, Caterpillar's vice president overseeing its finance services division, is expected to testfy on Tuesday before the subcommittee.
The company released her remarks Monday night. "In fact, Caterpillar's effective income tax rate averages about 29 percent, which is one of the highest for a U.S. multinational manufacturing company. Caterpillar's philosophy is that our business structure drives our tax structure. We comply with the tax laws enacted by Congress, by the states and by all of the many jurisdictions in which we conduct business."
After an extensive review of Caterpillar's international tax compliance, the subcommittee chairman's staff report focuses on one aspect of our overall business: parts sales outside of the U.S. by Caterpillar subsidiary, Caterpillar SARL (CSARL), the company said.
"CSARL is a major operating company with thousands of people around the world who perform strategically critical work to support our customers in non-U.S. markets," Lagacy is expected to testify. 'We grow and build near our customers worldwide, not only because it's what they demand, but because remaining globally competitive helps create jobs in the United States."
In a prepared statement, PricewaterhouseCoopers said Monday: "Our advice to Caterpillar and its external counsel helped Caterpillar evaluate how best to organize its expanding global operations, aligning the economics of such global operations with carefully considered U.S. tax policies. Our advice was founded on years of extensive work overseas and in the United States and included detailed analyses of Caterpillar's global operations and the impact of various potential business reorganizations on Caterpillar's tax position.
"Caterpillar compensated PwC for the six years of extensive work we undertook to understand the company's complex global operations, the tax effects of the realignment and for our expertise. We stand by the work we did for them."
There are no Caterpillar parts manufacturing, warehousing, or distribution facilities in Switzerland. There are 8,300 Caterpillar parts employees worldwide—only about 65 work in Switzerland.
Yet, the committee report said, from 2000 to 2012—Caterpillar booked more than 85 percent of the profits from the parts division on its books in Switzerland.