Why ‘Cum-Ex’ Tax Dodge Casts Shadow on Global Banks: QuickTake

Sept. 24, 2021, 4:00 AM

The investment seemed virtually risk-free, guaranteeing hefty returns after only a short period of trading. By exploiting how Germany once taxed dividend payments, dozens of bankers, brokers and lawyers helped investors snatch billions of euros from the national treasury. A decade later prosecutors won their first convictions for tax crimes, while more than 1,000 people face investigation in what’s come to be called the Cum-Ex affair.

1. What’s a cum-ex trade?

The trades exploited an interpretation of the tax code that appeared, at the time, to let multiple people claim ownership of the same stock and — crucially — the ...

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