Wal-Mart Stores Inc. owns more than US$76 billion of assets through a web of units in offshore tax havens around the world, according to a new study.
The study, researched by the United Food & Commercial Workers International Union, said Wal-Mart has at least 78 offshore subsidiaries and branches, more than 30 created since 2009 and none mentioned in US securities filings, Bloomberg News reported.
Overseas operations have helped the company cut more than US$3.5 billion off its income tax bills in the past six years, Wal-Mart’s annual reports show.
The study found 90 percent of the company’s overseas assets are owned by subsidiaries in Luxembourg and the Netherlands, two of the most popular corporate tax havens.
Units in Luxembourg — where the company has no stores — reported US$1.3 billion in profits between 2010 and 2013 and paid tax at a rate of less than 1 percent, according to the study published Wednesday in a report by Americans for Tax Fairness.
All of Wal-Mart’s roughly 3,500 stores in China, Central America, the United Kingdom, Brazil, Japan, South Africa and Chile appear to be owned through units in tax havens such as the British Virgin Islands, Curacao and Luxembourg, the report said.
The union conducted its research using publicly available documents filed in various countries by Wal-Mart and its subsidiaries.
Randy Hargrove, a Wal-Mart spokesman, called the report incomplete and “designed to mislead” by its union authors.
He said the company 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 union behind the study backs the Organization United for Respect at Wal-Mart, a group that campaigns for wage increases and more predictable schedules.
Wal-Mart has historically resisted unions and discourages employees from joining them.
US companies owe tax at a rate of 35 percent but can defer indefinitely the income taxes on profits attributed to overseas units, Bloomberg said.
– Contact us at [email protected]