Trial against “inventors” begins
Authorities recover money from cum-ex deals
April 2, 2022, 4:40 p.m
For years, banks and professional investors have been cheating countries out of tax revenue with confusing stock shedding. Some of the federal states are demanding back the lost income. So far, apparently, more than 1.8 billion euros have come together.
Shortly before the trial against the alleged driving force behind the cum-ex deals in Germany, the German tax authorities recovered at least around 1.8 billion euros of their damage, according to a newspaper report. This was the result of a survey by the “Frankfurter Allgemeine Sonntagszeitung” among the finance ministries of the most affected federal states. Hanno Berger, who is considered the architect of the cum-ex deals at the expense of the state treasury, is to answer before the Bonn Regional Court from Monday.
In the case of cum-ex transactions, numerous financial institutions cheated the state by an estimated double-digit billion amount. They used a loophole in the law at the time. Around the dividend record date, shares with (“cum”) and without (“ex”) dividend rights were pushed back and forth between several participants. At the end of the confusion, tax offices reimbursed capital gains taxes that had not been paid at all. In 2012 the tax loophole was closed. In the summer of 2021, the Federal Court of Justice then made it clear that cum-ex transactions are to be assessed as tax evasion and are therefore punishable.
Each state finance ministry is responsible for the reclaims itself. According to the FAS, not all federal states can quantify how much is still outstanding. In Hesse alone, however, the financial administration recovered around one billion euros. The total volume of cum-ex cases complained about there is around 1.5 billion. According to the newspaper, more than 300 million euros have been reclaimed in Bavaria and Hamburg, and around 160 million in Baden-Württemberg. The Ministry of Finance in North Rhine-Westphalia did not give a number.