CityPress - - Business -

al­mart Stores owns more than $76 bil­lion (R925 bil­lion) of as­sets through a web of units in off­shore tax havens around the world. But you wouldn’t know it from read­ing the re­tailer’s an­nual re­port.

A new study has found that Wal­mart has at least 78 off­shore sub­sidiaries and branches, more than 30 cre­ated since 2009 and none men­tioned in US se­cu­ri­ties fil­ings. Over­seas oper­a­tions have helped the com­pany cut more than $3.5 bil­lion off its in­come tax bills in the past six years, its an­nual re­ports show.

The study, re­searched by the United Food & Com­mer­cial Work­ers’ In­ter­na­tional Union and pub­lished this week in a re­port by Amer­i­cans for Tax Fair­ness, found that 90% of Wal­mart’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 $1.3 bil­lion in profit be­tween 2010 and 2013, and paid tax at a rate of less than 1%, ac­cord­ing to the re­port.

All of Wal­mart’s roughly 3 500 stores in China, Cen­tral Amer­ica, the UK, Brazil, Ja­pan, South Africa and Chile ap­pear to be owned through units in tax havens such as the Bri­tish Vir­gin Is­lands, Cu­ra­cao and Lux­em­bourg, ac­cord­ing to the re­port from the ad­vo­cacy group. The union con­ducted its re­search us­ing pub­licly avail­able doc­u­ments filed in var­i­ous coun­tries by Wal­mart and its sub­sidiaries.

Randy Har­grove, a Wal­mart spokesper­son, called the re­port in­com­plete and “de­signed to mis­lead”. He said the com­pany had “pro­cesses in place to com­ply with ap­pli­ca­ble US Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) and In­ter­nal Rev­enue Ser­vice rules, as well as the tax laws of each coun­try where we op­er­ate”.

The union be­hind the study backs the Or­gan­i­sa­tion United for Re­spect at Wal­mart, a group that cam­paigns for wage in­creases and more pre­dictable sched­ules. Wal­mart has his­tor­i­cally re­sisted unions and dis­cour­ages em­ploy­ees from join­ing them.

The re­port comes a week af­ter the G20 na­tions un­veiled their latest ef­fort to com­bat multi­na­tional cor­po­rate tax avoid­ance. The body wants com­pa­nies to dis­close to reg­u­la­tors where they book prof­its, em­ploy­ees and sales, so tax author­i­ties can be aware of dis­crep­an­cies be­tween where cor­po­ra­tions re­port in­come and where they have oper­a­tions.

Har­grove pointed to guid­ance is­sued by the SEC that per­mits com­pa­nies to avoid dis­clo­sure of sub­sidiaries with sig­nif­i­cant “in­ter­com­pany trans­ac­tions”. He said Wal­mart’s tax sav­ings over­seas were driven by lower rates in mar­kets, in­clud­ing Canada and the UK.

Com­pa­nies such as Google, Ap­ple and Star­bucks have come un­der fire for avoid­ing bil­lions of dol­lars of in­come taxes by at­tribut­ing prof­its to mail­box sub­sidiaries in low-tax ju­ris­dic­tions like Ber­muda.

The G20 has di­rected the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD) to de­velop plans to crack down on such strate­gies.

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