January 10, 2018 / 6:57 PM / 2 months ago

Dividend stripping deprives Germany of $6.3 billion in tax -report

FRANKFURT/BERLIN, Jan 10 (Reuters) - Prosecutors and tax investigators are currently investigating 417 suspected cases of so-called dividend stripping in Germany that resulted in 5.3 billion euros ($6.34 billion) of unpaid taxes, German media reported on Wednesday.

The information was disclosed by Germany’s Finance Ministry in response to a request by newspaper Sueddeutsche Zeitung and public broadcasters NDR and WDR, Sueddeutsche said in an excerpt of an article to be published on Thursday.

The ministry was not immediately available for comment.

Dividend stripping, also known as “cum-ex” transactions, involved buying a stock just before losing rights to a dividend, then selling it, taking advantage of a now-closed legal loophole that allowed both buyer and seller to claim tax credits.

Investigations into the use of such schemes by a number of banks in Germany have been going on for several years.

$1 = 0.8361 euros Reporting by Christoph Steitz and Klaus-Peter Senger. Editing by Jane Merriman

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