Walmart hid $76bn of assets in foreign tax havens, new study claims

Walmart Store

Walmart hid $76bn of assets in tax havens across the world, including $64.2bn 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% in tax on profits of more than $1.3bn between 2010 and 2013.

A spokesman for Walmart, denied that the company passed its overseas profits through Luxembourg in order to avoid tax. The spokesman, Randy Hargrove, told the Guardian 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 favourable time zone 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 $64.2bn 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 $6.2 billion in US federal corporate income tax last year, nearly 2% of all corporate income tax collected by the US treasury. Walmart also pays over $10bn in payroll taxes for its 1.3m US associates. In addition, Walmart paid $3.3bn in property tax, state income tax, franchise tax and other state taxes.”

He said Walmart 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 report said that Walmart’s 592 British stores are owned via Broadstreet European Holdings Co-operative 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.

Walmart, which is majority-owned by the Walton Family (who are said to be worth a combined $175bn), made $27.4bn profit before tax last year.

Nancy Reynolds, a cashier at a Walmart store in Merritt Island, Florida, said: “Walmart’s tax havens are making one of the richest families in the world even richer while Walmart workers continue to struggle to get by on poverty-level wages. It’s time for Walmart and the billionaire Waltons to pay their fair share – both by implementing a $15/hour minimum wage in the US, and committing to pay their fair share of taxes all around the world.”

Alke Boessiger of global union UNI said: “We have known for a long time that Walmart’s low-road business model keeps many of its own workers in poverty and encourages abuses throughout the company’s global supply chain. Now we know that Walmart’s low-road business model includes the extensive use of tax havens to avoid paying its fair share of taxes all over the world.”

Powered by article was written by Rupert Neate in New York, for on Wednesday 17th June 2015 18.37 Europe/ © Guardian News and Media Limited 2010


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