Walmart Stashes $76 Billion in Secret Overseas Tax Havens: Report
Business + Economy

Walmart Stashes $76 Billion in Secret Overseas Tax Havens: Report


Walmart owns more than $76 billion worth of assets through an extensive network of 78 subsidiaries and branches located in 15 countries considered tax havens, according to a new report released by Americans for Tax Fairness, a tax-reform advocacy group.

Walmart has never listed the subsidiaries in its annual 10-K filings with the Securities and Exchange Commission, the report says, adding that the $76 billion held overseas is equivalent to 37 percent of the company’s total assets and 90 percent of the assets in its international division. 

Related: The Real Reason Walmart Is Raising Worker Pay

The report, researched by the United Food & Commercial Workers International Union, also suggests that the retail giant may be skirting a legal requirement for companies to list subsidiaries that account for more than 10 percent of assets or income. “Our sense is that’s the case,” said Frank Clemente, executive director of Americans for Tax Fairness. “I will leave it to the SEC to figure out whether they are breaking the law or not.” 

Randy Hargrove, a Walmart spokesman, called the report “incomplete” and “erroneous.” Hargrove added that 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.”

Most if not all of the company’s nearly 3,500 stores in Central America, the United Kingdom, Brazil, Japan, China, Chile and South Africa are owned through subsidiaries in tax havens, the report found. Luxembourg is home to 22 subsidiaries (yet no Walmart stores) with $64.2 billion in assets. Since 2011, Walmart has transferred more than $45 billion in assets to Luxembourg subsidiaries, and has paid less than 1 percent in tax in the country on $1.3 billion in profits from 2010 to 2013, according to the report.

Related: Wal-Mart Presses Case for Repairs at Stores in Labor Dispute

Overall, American companies are holding more than $2 trillion in untaxed profits overseas, keeping that money outside the U.S. in an effort to reduce their tax liabilities. The rapid growth in those foreign holdings has prompted widespread calls for corporate tax reform that would encourage businesses to repatriate those profits. While the new report focused on Walmart, it also noted that 21 Fortune 500 companies are known to each have more subsidiaries in tax havens than the 78 Walmart subsidiaries it documents.

“It is our hope that this case study about Walmart’s secretive and extensive use of tax havens causes members of Congress to rethink their approach on how to tax these offshore profits and international tax issues in general,” the report’s authors wrote, adding that “when large corporations avoid taxes, the rest of us have to make up the difference.” 

Top Reads from The Fiscal Times