The highest German Court of Justice in Karlsruhe has ruled that it is illegal to reclaim dividend tax several times while the dividend tax has been paid only one time.
The scheme which came to be known as cum/ex fraud, involved buying and selling large amounts of stock around the payment date of dividends.
Although the dividend tax due was paid only once, it was reclaimed by both the seller and the buyer.
According to the collective of journalists “The Cumex Files” approximately 55 billion euros were stolen from governments by using this scheme.
The Court’s decision sets a precedent for many ongoing legal procedures on this issue and it could allow the German government to reclaim billions of euros worth of lost tax income.
The German Court also dismissed 2 appeals from British investments bankers and a Germen bank wo were conceited for their part in this scheme.
Nicholas D., 38 and Martin S. 41, were sentenced to suspended prison sentences in March 2020 after they were found to have deprived the state of at least 400 million euros.
The private banker MM Warburg had to pay 176 millions euros for facilitating this scheme.