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A tax scheme on dividends has cost 140 billion euros to ten countries

2021-10-21T16:05:52.686Z


According to an investigation by an international media consortium revealed on Thursday, the amounts not collected by these states would be three times greater than the “CumEx Files” scandal of 2018.


A tax scheme on dividends has cost the tax authorities of a dozen countries, including France and Germany, at least 140 billion euros for twenty years, unveiled Thursday a consortium of international media which investigated the topic.

The amounts not received by these states, which also include Belgium, are nearly three times higher than the first revelations dating back to 2018 from this group of sixteen media, called “

CumEx Files

”.

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The amount, initially estimated at 55 billion euros, has been largely revised upwards, in particular because the revelations of Thursday relate to a longer investigation period, ranging from 2000 to 2020, details the French newspaper

Le Monde

, which makes part of the consortium.

The "

CumCum

"

practice

Mainly targeted in these latest revelations of tax fraud on dividends concerning France, the practice known as "

CumCum

" in financial jargon.

This consists of avoiding taxation on dividends which must in principle be paid by foreign holders of shares of listed French companies.

To take advantage of the scheme, these owners of shares, small savers or large investment funds according to Le Monde, entrust their securities to a bank when the tax is collected, thus avoiding taxation. Banks, for their part, play an intermediary role, while taking a commission from shareholders, the newspaper continues.

The consortium's investigation also shows that four French banks, BNP Paribas, Société Générale, Natixis and Crédit Agricole via its subsidiary Cacib, were the subject of investigations by the tax administration in 2017 on the subject, and that these these have "

accelerated

" in recent months.

"

Verifying the conditions under which temporary sales of securities are carried out is naturally one of the subjects examined

" by the tax authorities, reacted Crédit Agricole in a comment sent to AFP.

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The group affirms that it "

does not offer arrangements to its clients for the purpose of dividend arbitrage nor does it carry out dividend arbitrage transactions for its own account

", but that it conducts hedging transactions "

in compliance with the legal, fiscal and regulatory rules in force

”.

Solicited, Societe Generale and Natixis declined to comment on the revelations.

BNP Paribas did not respond to our requests immediately.

The French Ministry of Finance has not followed up on AFP's requests for the time being.

The French Banking Federation, for its part, affirmed that the situations cited in the article fall within the sovereign appreciation of the courts, adding that the banks "

are among the largest contributors to French public finances

".

Source: lefigaro

All business articles on 2021-10-21

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