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The Times cited a report prepared by a Dartmouth College professor that investigated the heavy-machinery maker’s tax practices.
Its main finding was that Caterpillar avoided reporting on billions of dollars it brought to the US from its Swiss units and affiliates. The report found that Caterpillar returned an estimated $7.9 billion in funds structured as loans that it did not report for tax or accounting purposes, The Times reported.
“I believe that the company’s noncompliance with these rules was deliberate and primarily with the intention of maintaining a higher share price,” wrote Leslie Robinson, the Dartmouth accounting professor who compiled the report, which was reviewed by The Times but not yet by Caterpillar.
“We were not provided a copy of the report,” Corrie Scott, a Caterpillar representative, said in an emailed statement. “We will not offer comment on a report we haven’t seen.”
Caterpillar shares were down 3% in premarket trading following The Times’ report.
On Thursday, law-enforcement officers – including some wearing jackets with the Internal Revenue Service logo – executed a search warrant at Caterpillar’s facilities in the Peoria, Illinois, area.
Multinationals like Caterpillar face a 35% tax rate in the US, steeper than the prevailing rates in most other developed economies. This discourages them from repatriating overseas earnings and facing US taxes. President Donald Trump has proposed that companies with large stashes of overseas cash be able to return them at a 10% rate.