Just because Walmart figured out a way to sell consumer products for cheaper than your local mom and pop shop, effectively putting it out of business, doesn’t mean that this multinational corporation is evil — or so goes the claim by many a radical capitalist in defense of one of the world’s most hated businesses. Too bad this isn’t actually the case, though, as it has now come to light that part of Walmart’s takeover strategy involves hiding its billions of dollars in profits in offshore tax havens to avoid paying the exorbitant taxes otherwise incurred by small businesses.
More than $76 billion worth of Walmart’s assets, according to a new report, are held overseas in trusts and other crafty financial instruments, shielding the company from its U.S. tax burden. A shocking 90% of Walmart’s overseas assets are currently being held in either Luxembourg or the Netherlands, the former of which doesn’t even have a single Walmart store within its borders.
By manipulating its holdings into at least 78 offshore subsidiaries and branches, more than 30 of which were created just in the past six years, Walmart has avoided paying more than $3.5 billion in income taxes during this time, according to research compiled by the United Food & Commercial Workers International Union. Walmart units in Luxembourg alone, where the company doesn’t have any stores, somehow reported $1.3 billion in profits between 2010 and 2013, for which it paid taxes at a rate of less than 1%.
According to Bloomberg Business, every single one of Walmart’s roughly 3,500 stores located in China, Central America, the U.K., Brazil, Japan, South Africa and Chile are owned by special units in the British Virgin Islands, Curacao and Luxembourg, all of which are tax havens. Such information was gathered from publicly available documents filed by Walmart and its many subsidiaries in countries around the world.
Walmart, Apple, Amazon and many others gain upper hand over small business by sheltering assets overseas
The corporate income tax in the U.S. is said to hover around 35%, which is quite the pretty penny in terms of its cut of business revenues. And while there’s substantial evidence to show that a federal income tax isn’t even constitutionally legitimate in the first place, small businesses fighting the Walmart giant and other multinational corporate predators don’t have the luxury of dodging it like this.
Consequently, Walmart, Apple, Amazon and many others are able to gain an upper hand by avoiding these taxes, which isn’t at all fair in a supposedly free marketplace. And to make matters worse, Walmart is among the worst corporations when it comes to employee pay and benefits, hence its reputation as a predator and an exploiter.
“This report is continuing evidence that everybody has been engaging in cross-border tax avoidance,” stated Stephen E. Shay, a professor at Harvard Law School and former deputy assistant secretary for international tax affairs at the Obama Treasury Department, to Bloomberg Business.
According to the report, Walmart’s offshore earnings have ballooned substantially since 2008, escalating from $10.7 billion to $23.3 billion. For this and other reasons, the group Americans for Tax Fairness is calling on the European Union to conduct an investigation into Walmart’s overseas tax shelters, particularly in Luxembourg, to see if the company is profiting from illegal state aid.
You can read the group’s report on Walmart here:
“Typically, the primary purpose for a corporation to set up subsidiaries in tax havens where it has little to no business operations and few, if any, employees is to pay little, if any, taxes and to maintain financial secrecy,” says Americans for Tax Fairness.
Previously, Natural News has also reported on how Walmart, along with Costco and other Western supermarkets, profit from slave labor in Asia.