Caterpillar Offshore Tax Strategy focus of U.S. Senate investigation

By WEEK Producer

March 24, 2014 Updated Mar 24, 2014 at 9:59 PM CDT

WASHINGTON, D.C. – More trouble could be brewing for big yellow.

A U.S. Senate panel has now scheduled a hearing on Caterpillar's Offshore Tax Strategy.

That announcement comes just days after rumors swirled that Caterpillar was being investigated for improperly avoiding U.S. taxes by moving profits outside the country.

The Permanent Subcommittee on Investigations will meet in Washington, D.C. at 9 a.m. on April 1. The meeting will include witnesses from Caterpillar, as well as tax experts.

Caterpillar officials released a statement Monday in response to the announcement stating that CAT representatives have voluntarily agreed to testify in the hearing in relation to the company’s business operations.

It goes on to say that Caterpillar’s corporate effective tax rate comes out to about 29-percent, which they say is “relatively high for a company with substantial earnings generated from business activities outside the United States”.

Caterpillar had more than $50 billion in revenue last year.

As of December, the company had $17 billion in overseas profits, which is up significantly from three years ago.

These profits have not been taxed by the U.S.