![]() Date: 2024-08-16 Page is: DBtxt003.php txt00017794 | |||||||||
Tax Avoidance | |||||||||
Burgess COMMENTARY Peter Burgess | |||||||||
Before you shop at Walmart this Black Friday
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11:04 AM (2 minutes ago) to me Quartz Back in July, Quartz reporter Max de Haldevang stumbled across something confusing. He was digging through 200,000 leaked documents shared with Quartz as part of the Mauritius Leaks. Among the many files exposing tax dodging, he found a handful detailing incredibly complex offshore structures belonging to Walmart—the world’s biggest company—and sent them to a source who he thought might know what was going on. The next day, the source called. “I know what’s happening here, but I’m afraid can’t tell you,” the person said. After some persuading, they revealed that the files showed a small piece of a scheme to dodge a fortune in US tax. “They could owe the IRS billions. That’s billions with a ‘B,’” the person said. Max gave the source his address and said he’d appreciate anything they could anonymously send him. The following month, hundreds of pages of documents landed on his doorstep. The files showed an elaborate plan, titled “Project Flex,” to avoid $2.6 billion in US tax by creating a “fictitious” Chinese entity, which didn’t actually exist under Chinese law. If the IRS went after the retail giant for the money, it would be seeking the second biggest tax repayment in US history. Max parsed giant webs of files to corroborate the story. He discovered a slide in the Paradise Papers that showed part of the structure, and hunted through corporate filings in Hong Kong, the Netherlands, and the UK for the rest. Eventually, he also found two more people in the know who confirmed the leaked files were accurate. (Walmart rejected legal scholars’ assessment that they could owe money to the IRS, but didn’t contest the factual reporting.) After Quartz published the story in September, he received another whistleblower filing. This one, which Quartz is publishing today, said Walmart had dodged almost $200 million between 2009 and 2010, and could have improperly claimed up to $400 million more in foreign tax credits. It allegedly did so by sending money from the tax haven of Luxembourg to the US with a pit stop in the UK, and neglecting to tell the IRS the transactions started in Luxembourg. Max delved back through British and Luxembourgish filings to confirm the story—and even got hold of a 90-minute recording of the whistleblower being interviewed by IRS agents. Neither scheme was illegal, but both provided an insight into the lengths multinationals travel to dodge taxes. As shoppers dash for Walmart’s Black Friday deals, take an inside look at how lawyers and accountants at the world’s biggest company try to shave their tax bill. Want to support an investigation like this? Here’s how. If you know eyebrow-raising dealings at Walmart or other companies, contact Max at: 1. Email (insecure): mdh@qz.com 2. Signal (secure): +1 929 202 9229 3. Mail or Secure Drop (secure & anonymous): qz.com/tips Become a Quartz member to support high-quality, investigative journalism like this in a time when we need it most. Support our journalism You're receiving this email because you signed up for one or more emails from Quartz. Click here to unsubscribe. Quartz | 675 Avenue of the Americas, 4th Fl | New York, NY 10011 | United States Copyright © 2019 Quartz, All rights reserved.
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