Germany: Top court rules 'CumEx' deals are criminal tax evasion

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Germany’s highest court ruled that ‘CumEx’ tax transaction deals are criminal tax evasion in Karlsruhe on Wednesday.

The ruling was part of a judgement upholding multi-million euro fines on a German private bank as well as two UK-based stock traders.

Dietlind Weinland, spokesperson for the Federal Court of Justice stated that the court had “declared the behaviour in the CumEx matters as a punishable offence of tax evasion.”

“Today is only the tip of the iceberg, there are numerous cases which are pending in the courts and today’s verdict provided clarity,” she added.

The ‘CumEx’ scandal saw share traders use loopholes to claim back tax repayments from European governments on taxes that were never paid in the first place.

Participants in the scheme, which included banks, traders, and lawyers, traded shares with and without dividend rights to effectively claim ownership of shares at the same time as another party, allowing them to claim tax rebates they weren’t owed.

The practice was banned by Germany 2012, but only after over €55 billion ($64.94 billion) was lost across Europe before the practice was brought to widespread attention in 2017.

SOUNDBITES:

SOT, Rolf Raum, Chairman of Federal Court of Justice (German): “The fully filed revision by the accused D, has resulted without success. The precipe and carefully argued declaration of the county court are based on a comprehensive and convincing evaluation of evidence, which is holding up in the verification.”

SOT, Rolf Raum, Chairman of Federal Court of Justice (German): “Withheld capital tax can only be validated to the financial institution by a taxable person, it is not only complying with judicial intuition but furthermore results directly from the law. Even before the committing of a crime, a clear legal regulation existed.”

SOT, Rolf Raum, Chairman of Federal Court of Justice (German): “Only an actual paid tax can be made valid to the tax institutions, the law is speaking about raised or withhold and deducted.”

SOT, Rolf Raum, Chairman of Federal Court of Justice (German): “With these practices, it is not about the legal model neither or about the mere exploiting of a judicial loophole, because the legal regulation was clear and a loophole did not exist.”

SOT, Rolf Raum, Chairman of Federal Court of Justice (German): “It was about much more, rather not too different to normal sales tax fraud and blindly stick their hands into the pot in which all taxpayers usually pay into.”

SOT, Dietlind Weinland, Spokesperson of Federal Court of Justice (German): “The German Federal Supreme Court of Justice made its first verdict in the CumEx case. It declared the behaviour in the CumEx matters as a punishable offence of tax evasion.”

SOT, Dietlind Weinland, Spokesperson of Federal Court of Justice (German): “The particularly important thing in this case was that today is only the tip of the iceberg, there are numerous cases which are pending in the courts and today’s verdict provided clarity.”

#CumEx #Karlsruhe #Germany

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