Twist In Europe's Biggest Tax Fraud Case Involving Indian-Origin Tycoon
NDTV
The practice was named after Latin term, and allows multiple people to claim ownership of a stock and claim refunds on dividend tax that was only paid once.
Banks in the UK are set to be impacted by a tax fraud scandal, said to be Europe's biggest. According to UK-based financial website This Is Money, the 'cum-ex' tax fraud is worth 10 billion pounds in Germany alone. Nearly 2,000 suspects in London alone, including bankers, brokers and hedge fund managers, are involved in the case, said the financial website. The banks under investigation are Britain's Barclays, Bank of America Merrill Lynch, Morgan Stanley of the US, France's BNP and Japan's Nomura. Several law firms and auditors are also implicated, along with an Indian-origin tycoon, who lost a final bid to block proceedings against him.
At least half a dozen 'cum-ex' probes were started in Germany, with one in Cologne being the broadest. The banks say they are cooperating with prosecutors. Investigations were opened in other countries including Belgium and Denmark.
According to an old Washington Post report, the scam was essentially a double-tipping strategy that exploited a loophole in the tax code, allowing multiple people to claim ownership of a stock and claim refunds on dividend tax that was only paid once.
