Wal-Mart is using a network of offshore tax havens to shelter $76 billion in undisclosed assets, said a report by Americans for Tax Fairness, a union-supported tax-reform advocacy group.
The report says Wal-Mart failed to disclose its complicated network of 78 subsidiaries located in 15 tax havens in its U.S. securities filings.
“[Wal-Mart] is using tax-haven subsidiaries to minimize foreign taxes where it has retail operations and to avoid U.S. tax on those foreign earnings,” said Americans for Tax Fairness.
The report notes that 90 percent of Wal-Mart’s overseas assets are owned by subsidiaries in Luxembourg and the Netherlands, where the company has no stores.
Wal-Mart’s Luxembourg subsidiaries had $1.3 billion in profits between 2010 and 2013, but paid just $2.4 million in taxes, the report said.
According to Bloomberg, Wal-Mart spokesman Randy Hargrove said the report contains incomplete information “designed to mislead.”
Hargrove said Wal-Mart has “processes in place to comply with applicable SEC and IRS rules, as well as the tax laws of each country where we operate.”
The United Food & Commercial Workers International Union helped research the report, The Wall Street Journal said. The union group supports the Organization United for Respect at Wal-Mart, a group that advocates on behalf of Wal-Mart workers for wage increases, better schedules and other improvements.
Hargrove said Wal-Mart – which reported $16.2 billion in U.S. profits last fiscal year – paid $6.2 billion in U.S. federal corporate income tax last year. In its securities filing, Wal-Mart said it had $23.3 billion in profit from its international subsidiaries, which it said it permanently reinvested overseas.
Wal-Mart is just the latest company to come under scrutiny for avoiding income taxes by attributing profits to subsidiaries in low-tax jurisdictions, Bloomberg said. Google, Inc., Apple Inc. and Starbucks Corp. have also been accused of using off-shore tax havens to shelter profits.
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