The ‘Cum-Ex’ and ‘Cum-Cum’ Tax Dodges Haunting Banks: QuickTake

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. In Germany alone, some 1,800 people are facing investigation in what’s come to be called the Cum-Ex affair. Now French banks have been ensnared in a similar strategy known as Cum-Cum.

1. What’s a Cum-Ex trade?

The trades exploited an interpretation of the tax code that appeared, at the ...