FRANKFURT, July 14 (Reuters) - HypoVereinsbank, the German arm of Italy’s UniCredit, is in talks with German prosecutors to pay a fine to put two tax probes behind it, two people familiar with the matter said.
HypoVereinsbank and the Cologne prosecutors declined to comment on the development, which was first reported by German daily Sueddeutsche Zeitung on Tuesday.
HypoVereinsbank has acknowledged conducting so-called “cum-ex” transactions, also known as dividend stripping, that helped clients avoid taxes. Separately, the Munich-based lender helped rich clients evade taxes by setting up offshore shell companies in Luxembourg to hide some of their wealth from tax authorities.
At a meeting later this month, HypoVereinsbank’s supervisory board is set to discuss the case, which would see the lender pay just below 10 million euros for the cum ex misconduct and more than 10 million for the Luxembourg activities, Sueddeutsche Zeitung reported.
A loophole in German law that enabled the cum ex strategy was closed in 2012 and lawyers are divided over whether the previous practice was actually illegal or just objectionable.
HypoVereinsbank has set aside around 200 million euros in recent years in provisions to cover possible liabilities. Other German banks have also been caught up in dividend stripping probes.
Public sector lender HSH Nordbank has also handed over documents regarding its involvement in cum ex transactions and is hoping put the case behind it soon, a person familiar with the bank said.
Alongside HypoVereinsbank, other banks like Commerzbank , are ensnarled in the Luxembourg tax probe.
In February, Commerzbank confirmed that prosecutors had launched an investigation into the bank and its clients in connection with the suspected hiding of capital gains with the help of banks in the Grand Duchy. (Reporting by Alexander Hübner; additional reporting by Andreas Kröner; writing by Arno Schuetze; Editing by Mark Trevelyan)