Caterpillar representatives to testify on off-shore sales tax strategy

By WEEK Producer

March 31, 2014 Updated Mar 31, 2014 at 11:17 PM CDT

WASHINGTON, D.C. -- Caterpillar's Vice-President for Financial Services will testify before a U.S. Senate subcommittee on Tuesday morning about how the company handles taxes on off-shore sales.

Julie Lagacy, quoted in prepared testimony released by Caterpillar on Monday, said the company's effective income tax rate is 29-percent and that is higher than the average income tax rate for U.S. Corporations.

Caterpillar complies with U.S. tax laws, Lagacy is quoted as saying.

Lagacy is also quoted as saying Caterpillar has paid approximately $1.8 billion in Federal Income Tax over the last three years.

The Senate subcommittee is looking into the sale of Caterpillar replacement parts which are, according to the company, generally purchased by Caterpillar affiliates overseas and are subject to U.S. taxes on a deferred basis.