Wal-Mart has $76-billion in overseas tax havens, report says

Wal-Mart Stores Income owns more than $76-billion (U.S.) of assets through a web of units in offshore tax havens around the world, though you wouldn't know it from reading the giant retailer's annual report.
Recently a  new study has found that Wal-Mart has at least 78 offshore subsidiaries and branches, more than 30 created since 2009 and none mentioned in U.S. securities filings. Abroad or overseas operations have had helped the company cut more than $3.5-billion off its income tax bills in the past  years, its annual reports show.
Units in Luxembourg – where the company has no stores – reported $1.3-billion in profits between 2010 and 2013 and paid tax at a rate of less than 1 per cent, according to the research report.
All of Wal-Mart's roughly 3,500 stores in China, Central America, the U.K., 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 Wal– Mart and its subsidiaries.
'Conclusive Evidence'
 The Companies like Google Inc., Apple Inc. and Starbucks Corp. have come under fire for avoiding billions of dollars of income taxes by attributing profits to mailbox subsidiaries in low-tax jurisdictions like Bermuda. Group of  state of Twenty has directed the Organization for Economic Cooperation and Development to develop plans to crack down on such strategies.
The Hybrid-Loan Strategy
Around a decade ago, Wal-Mart ran into trouble over strategies to avoid U.S. state income taxes. It used a real estate investment trust to effectively pay rent to itself, generating big tax deductions, even though the rent payments never left the company. At least six states changed their tax laws after publicity about the tactics.
Since then, Wal-Mart has stepped up its use of offshore tax havens. It has created 20 new subsidiaries in Luxembourg alone since 2009, according to the report.
Wal-Mart employs a popular legal strategy in that country called a hybrid loan. It permits companies' offshore units to take tax deductions for interest paid – typically on paper only – to their parents in the U.S. The parent, however, doesn't include that interest as taxable income in the U.S.