Caterpillar's Offshore Tax Strategy

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99 pages
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Brief Executive Summary
The Senate Committee on Homeland Security and Governmental Affairs' Permanent Subcommittee on Investigations reports their case study on Caterpillar Inc. that demonstrates a U.S. multinational shifting taxable profits to a foreign affiliate in a tax haven to defer or avoid paying U.S. taxes. The Subcommittee reviewed thousands of corporate documents and depositions taken in connection with the lawsuit. They conducted over 15 interviews with current and former executives and managers. The investigation shows Caterpillar paid to develop and implement a tax strategy designed to lowers its taxes by sending more profits from its parts business in Switzerland. The report recommends that the IRS must clarify enforcement, rationalize profit splitting, participate in OECD multinational corporate tax effort, and eliminate auditing and tax consulting conflicts of interest.
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