Damning New Report Reveals Walmart’s Elaborate Tax Dodging Scheme

June 17th, 2015

Awake Goy

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Wednesday morning, Americans for Tax Fairness released a new report looking at the practices Walmart – America’s biggest retailer – uses to reduce its own tax responsibilities.

The report details how Walmart used 78 different subsidiaries in 15 different offshore tax havens where it is not subject to American tax laws. The tax haven where the company keeps the most subsidiaries is Luxembourg.

In Luxembourg, Walmart utilizes 22 shell companies, with 20 of them established since 2009, five of them established just this year. The report notes that Walmart “does not have one store there [and] has transferred ownership of more than $45 billion in assets to Luxembourg subsidiaries since 2011. It reported paying less than 1 percent in tax to Luxembourg on $1.3 billion in profits from 2010 through 2013.”

The report notes that the company’s “use of inter-company debt permits it to avoid taxes overseas. It strips earnings out of higher-tax countries by taking out inter-company loans and pays interest to itself in tax havens where the interest income is taxed lightly or not at all.” In Luxembourg, Walmart gets about $1.5 billion of tax deductions annually by making interest payments to its parent company.

Altogether, the report estimates that 37 percent of Walmart’s total assets exist within shell companies that are parked in overseas tax havens, including 90 percent of the assets in Wal-Mart’s international division.

Americans for Tax Fairness concludes the report by asking the European Commission to review Walmart’s status in Luxembourg, questioning if the country’s deals with the company amount to illegal state aid. It is also requesting the Internal Revenue Service to audit the company’s use of overseas tax havens. Finally, it is asking the Securities and Exchange Commission to probe why Wal-Mart has not been disclosing its overseas tax havens in its U.S. tax filings.

Zaid Jilani is an AlterNet staff writer. Follow @zaidjilani on Twitter.

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