Caterpillar Tractor Co.:
Another Look at

Since the DISC provisions became law almost eight years ago, more than ten thousand DISCs have been formed, but no company has used DISCs more successfully than the Caterpillar Tractor Company. This article examines the company's strategy, its victory in the Court of Claims, and an updated approach for obtaining these benefits.

Caterpillar Tractor Co. used a DISC and a WHTC in tandem to obtain double benefits from the same transaction. The company sold its products to its WHTC when the goods had a Western Hemisphere destination and the WHTC received an arm's-length profit.. Then Caterpillar paid a commission on these sales to its DISC, and the profit to the DISC was based on the safe-haven intercompany pricing rules.

How the DISC-WHTC Combination Works
This tandem use of the DISC and WHTC was particularly beneficial because all of the substance was in the WHTC. Thus, the company was able to put a profit based on substance in the WHTC and a profit based on the safe-haven rules in the DISC. The following example illustrates the potential benefit of this device.


ROBERT FEINSCHREIBER is an attorney in the law firm of Robert Feinschreiber & Associates. He received his B.A. from Trinity College, LL.B. from Yale Law School, M.B.A. from Columbia Graduate School of Business, and LL.M. in Taxation from New York University. 

For a copy of the entire article please contact:
ExportDISC Management Company
pursuant to Section 993(a)(1)(H) and Section 993(b)(2)
Robert Feinschreiber & Margaret Kent

1121 Crandon Blvd. F301
Key Biscayne, FL 33149
Primary Phone: 305.361.5800
or 305.505.9200
Fax: 305.365.2276
caterpillar tractor, robert feinschreiber, whtc, disc, margaret kent, export, fisc