US law enforcement officials raided three Caterpillar (
www.caterpillar.com) facilities in Peoria, Illinois, earlier this month as part of an investigation that the company said may be related to business with its Swiss subsidiary CSARL.
A 2014 report by the US Senate is believed to have said that Caterpillar had avoided paying $2.4 billion in taxes since 2000 by shifting profits to a wholly controlled affiliate in Switzerland.
Before the arrangement, 85% of its profits were taxed in the USA, the report alleged. Afterwards, only 15% of its profits were taxed in the USA (the rest were taxed at a special rate in Switzerland).
A Caterpillar spokesman said: “We believe that the relevant transactions complied with the applicable tax laws and did not violate judicial doctrines.”
In January, Caterpillar announced that it plans to move its global headquarters and about 300 jobs to the Chicago area, after decades in Peoria.
It also cancelled plans to build a new headquarters in Peoria, which is located about 175 miles south west of Chicago.