“Cum ex” tax fraud reportedly cost Belgium 201 million euros
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“Cum ex” tax fraud reportedly cost Belgium 201 million euros

“Cum ex”, the international tax fraud that surfaced years ago in Germany, has had greater consequences than initially thought, a group of media investigating the Cum Ex files disclosed on Thursday. States hurt by the fraud include Belgium, which reportedly lost 201 million euros as a result of it.

The global impact of the gigantic tax scam has been put at 55.2 billion euros. Eleven (11) countries are affected: Germany, Belgium, France, Spain, Italy, the Netherlands, Denmark, Austria, Finland, Norway and Switzerland.

Until now the only estimates reported were those of the sums extorted from the German treasury, which the authorities put at 5.3 billion euros, although observers quoted a higher figure. The investigation results reported on Thursday mention losses of about 30 billion euros for Germany alone.

The 19 newsrooms participating in the investigation organized by the German Correctiv association, including Reuters and Le Monde, found that states were still losing money as a result of the fraud and that more States were affected than the German authorities had thought in recent years.  

The latest addition to the names mentioned in connection with the huge scam is Santander, the Spanish bank. The justice authorities in Cologne launched an investigation in June into Santander’s alleged role in the fraudulent procedure. The bank is suspected of “planning and executing” deals facilitating the massive fiscal fraud from 2007 to 2011, Reuters revealed.

The fraud’s nickname. “Cum ex” refers to the mechanism used by the fraudsters: it consisted of purchasing and reselling shares on the day that their dividends were being paid out, and doing the transactions so fast that tax administrations could no longer identify the names of the share’s real owners. The various parties involved then requested tax credits on a dividend that was paid only once.

Tax auditor Hanno Berger, a Switzerland-based German who became a tax adviser, is a central figure in this dossier, having advised a number of his clients and other financial institutions to use the procedure. He said this was all about exploiting a grey area, a gap in the legislation that was reportedly closed in 2012, but not everyone agrees.

The Macquarie Bank is also among the financial institutions mentioned as having benefited from this controversial “grey area”.

“Cum Ex” broke out in Germany in 2012, leading to the launch of six criminal investigations and a first trial, to be held in the West German city of Wiesbaden, targeting Hanno Berger and many Stock Exchange traders.

The frauds reportedly cost France “at least 17 billion euros”, Italy 4.5 billion, Denmark 1.7 billion and Belgium 201 million euros.

The Brussels Times