The report states that Walmart uses 78 subsidiaries and branches in 15 overseas tax havens, which may be used to minimize foreign taxes where it has retail operations and to avoid U.S. tax on those foreign earnings.
Some of the report’s key findings:
In 2014, Walmart’s tax-haven subsidiaries provided U.S. affiliates access to $2.4 billion in foreign earnings – in the form of low-interest, short-term loans – which may transgress U.S. law.
Walmart generates about $1.5 billion worth of tax deductions in Luxembourg each year by making phantom interest payments to its U.S. global parent. It uses a “hybrid loan, ” which makes this income disappear for tax purposes here and in Luxembourg.
Walmart’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.
The report further accuses Walmart of, “using tax-haven subsidiaries to minimize foreign taxes where it has retail operations and to avoid U.S. tax on those foreign earnings. Walmart apparently hopes the U.S. Congress will reward its use of tax havens by enacting legislation that would allow U.S.-based multinationals to pay little U.S. tax when repatriating current low-taxed foreign earnings (such as to fund infrastructure spending) and pay no tax with the adoption of a territorial tax system, ” stated the organization.
See the report here.