In todays global village it is easy to see why large multi-national companies try and take advantage of the different laws in various parts of the globe, however in some cases this can lead to behavior that is deemed both unethical and deceptive.
A good example of this can be seen with the Caterpillar Inc., the worlds largest construction equipment maker, whose machines can even be seen throughout the UBC campus. The Caterpillar Inc. had tried to evade tax of around US$2 billion over the period of 2000- 2009. By doing this not only have they saved money they have boosted their profits in financial statements. This was done through the use of offshore subsidiaries in countries such as Bermuda and Switzerland.
This financial statement fraud has several stakeholders to believe in the profitability of the Caterpillar Inc, including one of Caterpillar’s own tax managers, Daniel Schlicksup who filed the lawsuit. However, at the same time Edward Rapp the companies chief financial officer argued that they need “a level playing field when [they]compete with foreign competitors”.
Though Caterpillar Inc. might have been caught this time, it seems that todays business culture accept overseas subsidiaries as a way of cutting costs. However in this economic crises it raises the complex question, is it ethical?