US international retail chain Walmart concealed US$76bn of assets in tax havens across the world, including US$64.2bn managed by 22 different subsidiaries in Luxembourg, where the company has no stores, according to a just-published study.
According to the study, published by campaign group Americans for Tax Fairness and funded by trade union the United Food and Commercial Workers International (UFCW), Walmart has “kept its tax haven subsidiaries secretive by burying mention of their existence.”
The authors claim that the company’s global network conceals billions of dollars in assets from US tax authorities via a network of shell companies in Luxembourg, the Netherlands and various Caribbean countries offering low corporate tax rates.
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% in tax on profits of more than US$1.3bn between 2010 and 2013.
Walmart has denied the allegations. Company spokesman Randy Hargrove said that Walmart used its Luxembourg office to manage its affairs because “many banks are headquartered there, and the people are well educated”. Luxembourg also offered a favourable time zone for managing its international affairs.
Hargrove dismissed the overall report as “incomplete, erroneous information designed to mislead readers” and said that the allegation Walmart placed US$64.2bn assets under control of Luxembourg-registered companies was “wrong”. However, he did not offer 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.
“Walmart paid US$6.2bn in US federal corporate income tax last year, nearly 2% of all corporate income tax collected by the US treasury. Walmart also pays over US$10bn in payroll taxes for its 1.3m US associates. In addition, Walmart paid US$3.3bn in property tax, state income tax, franchise tax and other state taxes.”
He added that Walmart has “processes in place to comply with applicable Securities and Exchange Commission [SEC] and Internal Revenue Service [IRS] rules, as well as the tax laws of each country where we operate.”
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