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The Cum-ex Case: A Look at Germany

Author

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  • Bastian Schulz

    (University of Finance and Administration)

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.

Suggested Citation

  • Bastian Schulz, 2021. "The Cum-ex Case: A Look at Germany," ACTA VSFS, University of Finance and Administration, vol. 15(1), pages 49-62.
    • Handle: RePEc:prf:journl:v:15:y:2021:i:1:p:49-62
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    File URL: https://www.vsfs.cz/periodika/acta-2021-1-03.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    tax fraud; dividend taxes; cum-ex trading; tax evasion; withholding tax;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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