(wallstreetjournal) - Wal-Mart Stores Inc. uses a network of offshore tax havens to shelter profit from its overseas operations, according to a union-supported report that detailed the structures Wednesday.
The bulk of the retail giant’s international businesses are owned by entities set up in Luxembourg and the Netherlands, where the company has no stores, according to the report, which says its authors tracked down the subsidiaries by reviewing financial records around the world.
According to the report, Wal-Mart’s Luxembourg subsidiaries from 2010 to 2013 reported paying only $2.4 million in tax to the country on $1.3 billion in profit.
Wal-Mart spokesman Randy Hargrove said the report includes “incomplete, erroneous information designed to mislead readers.”
“This is the same union-supported group that regularly issues similar, flawed reports on Wal-Mart to promote their agenda rather than the facts,” Mr. Hargrove said. Wal-Mart paid $6.2 billion in U.S. federal corporate income tax last year, he said. The company reported $16.2 billion in profit in the fiscal year that ended Jan. 31.
The report was produced by Americans for Tax Fairness, a liberal-leaning advocacy group, with research help from the United Food & Commercial Workers International Union, which supports a group advocating for increased wages and other issues for Wal-Mart workers. Wal-Mart, the country’s largest private employer, has fought a long-running battle with the United Food and Commercial Workers union, which has tried unsuccessfully for years to organize the company’s workers.
A number of companies use subsidiaries in countries such as Ireland, Luxembourg and the Netherlands to aggregate and shelter profit from overseas operations. The U.S. taxes its companies’ profits wherever they are earned around the world, but the payments are only due once the money is repatriated to the U.S. parent. Full Story
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