German Banks May Face $695 Million Hit on Dividend Tax Loophole
German banks may face about ($695 million) of costs after helping investors take advantage of a loophole to reduce taxes.
(Bloomberg) -- German banks may face about 610 million euros ($695 million) of costs after helping investors take improper advantage of a loophole to reduce taxes on dividends, according to the country’s regulator.
About 60 lenders were directly involved in so-called cum-cum trades that allowed foreign investors to profit from tax breaks meant for Germany-based shareholders, a BaFin spokesman said, citing a survey by the regulator.
While some banks could face “high” repayment claims from tax authorities, it’s probably not enough to threaten their survival, the BaFin spokesman said. Any decision to demand payments from banks will be made by tax authorities, he said.
Read more on Cum-Ex, the other controversial German tax practice
The spokesman didn’t name any of the banks involved. DekaBank and Commerzbank AG both state in their public filings that they face risks related to cum-cum.
German newspaper Handelsblatt reported the results of the survey earlier on Monday.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Ross Larsen
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