ZCZC
BCN-46
EUROPE-GERMANY-BANKING-FRAUD-TAXATION
Massive tax scam cost Europe 55 bln euros: report
FRANKFURT AM MAIN, Oct 18, 2018 (BSS/AFP) – A gigantic years-long tax scam
saw banks drain 55 billion euros ($63 billion) from national treasuries in
Europe, a far larger sum than previously thought, media from across the
continent reported Thursday.
The so-called “cum-ex” deals relied on complex tax trickery that allowed
owners of shares to claim several times over refunds for tax paid only once
on dividend payouts — effectively syphoning off taxpayers’ money into
investors’ pockets.
So far estimates of the damage had ranged from 5.3 billion euros according
to the German finance ministry to 30 billion, according to press reports.
But a joint investigation by European media outlets has concluded that at
least 55.2 billion euros were stolen from 11 countries: Germany, France,
Spain, Italy, the Netherlands, Denmark, Belgium, Austria, Finland, Norway and
Switzerland.
Reportedly conceived by well-known German lawyer Hanno Berger, the cum-ex
method relies on several investors buying and reselling shares in a company
amongst themselves around the day when the firm pays out its dividend.
The stock changes hands so quickly that the tax authorities are unable to
identify who is the true owner.
Working together, the investors can claim multiple rebates for tax paid on
the dividend and share out the profits amongst themselves — with the
treasury footing the bill.
The cum-ex scandal first exploded in Germany in 2012, with six criminal
investigations opened and a trial against Berger and several stock market
traders.
Thursday’s investigation, led by investigative journalism website
Correctiv and drawing in big-name outlets like German public broadcaster ARD
and French newspaper Le Monde, calculates the damage to each country
involved.
In Germany, investors spirited away 31.8 billion euros, according to
calculations by University of Mannheim tax specialist professor Christoph
Spengel.
Meanwhile French taxpayers lost out to the tune of “at least 17 billion
euros”, Italians 4.5 billion, Danes 1.7 billion and Belgians 201 million.
BSS/AFP/HR/1450