Walmart hid US$76 billion of assets in tax havens across the world, including US$64.2 billion managed by 22 different subsidiaries in Luxembourg, where Walmart has no stores, according to a study published on Wednesday.
The study, published by campaign group Americans for Tax Fairness and funded by the United Food and Commercial Workers International Union, alleged that Walmart has “kept its tax haven subsidiaries secretive by burying mention of their existence.”
Walmart denied the claims.
The authors claimed Walmart’s global empire keeps billions of dollars of assets away from the prying eyes of the taxman via a network of shell companies in Luxembourg, the Netherlands and a host of Caribbean countries known for their low taxes.
According to the report, since 2011 Walmart has transferred ownership of its stores in Brazil, Japan, Puerto Rico and South Africa to Luxembourg. It claims that Walmart’s Luxembourg operations paid less than 1 percent in tax on profits of more than US$1.3 billion between 2010 and 2013.
Walmart spokesman Randy Hargrove denied that the company passed its overseas profits through Luxembourg in order to avoid tax. Hargrove told reporters that Walmart used its Luxembourg office to manage its affairs because “many banks are headquartered there, and the people are well educated.”
He also said Luxembourg had a favorable timezone for managing its international affairs. There is a seven-hour time difference between Luxembourg and Tokyo.
Hargrove dismissed the overall report as “incomplete, erroneous information designed to mislead readers.”
He said the report’s finding that Walmart placed US$64.2 billion assets under control of Luxembourg-registered companies was “wrong” but was unable to provide a correct figure.
In a statement he said: “This is the same union-supported group that regularly issues similar, flawed reports on Walmart to promote their agenda rather than the facts. This latest report includes incomplete, erroneous information designed to mislead readers. Walmart paid US$6.2 billion in US federal corporate income tax last year, nearly 2 percent of all corporate income tax collected by the US treasury. Walmart also pays over US$10 billion in payroll taxes for its 1.3 million US associates. In addition, Walmart paid US$3.3 billion in property tax, state income tax, franchise tax and other state taxes.”
He added that Walmart has “processes in place to comply with applicable SEC [US Securities and Exchange Commission] and IRS [US Internal Revenue Service] rules, as well as the tax laws of each country where we operate.”
The report said that Walmart’s 592 British stores are owned via Broadstreet European Holdings Co in the Netherlands and Azure Holdings Sarl in Luxembourg.
It makes Walmart the latest in a string of multinational companies, including Pepsi and IKEA, to be exposed for exploiting international tax loopholes via Luxembourg.
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