The Cum-ex Case: A Look at Germany Cover Image

The Cum-ex Case: A Look at Germany
The Cum-ex Case: A Look at Germany

Author(s): Bastian Schulz
Subject(s): Economy
Published by: Vysoká škola finanční a správní, a.s.
Keywords: tax fraud; dividend taxes; cum-ex trading; tax evasion;withholding tax;

Summary/Abstract: This paper focuses on a particular form of stock-market trades around ex-dividend days, so-called “cum-ex” transactions, which have resulted in major revenue losses due to illegitimate tax refunds in Germany and other European nations. Until 2012, the loophole in the German withholding tax scheme made it possible for cum-ex traders to receive withholding-tax certificates without prior withholding-tax payment. Because a certain category of investors might use the tax certificates to gain a tax exemption, this opened up the prospect of a particular form of tax arbitration. It was not until 2018 that a cross-border investigation team called the Cum-Ex Files revealed the scandal to its full extend. This paper will mainly focus on the cum-ex scandal in Germany since the literature on the topic is very limited.

  • Issue Year: 15/2021
  • Issue No: 1
  • Page Range: 49-62
  • Page Count: 14
  • Language: English