Veiled wealth management contracts.
270 tax police searched about 40 Commerzbank branches at their Frankfurt headquarters and elsewhere on 03 Dec 2013 seeking information about Italian partners who had advised the bank’s customers on how to avoid taxes using what only looked like tax-exempted life insurance, according to Bochum prosecutors who executed the razzia with Düsseldorf tax officials.
ZDF heute journal’s finance correspondent Valerie Haller said assets such as stock or bonds in “depots” at the bank that should have been subject to capital gains tax were instead “wrapped in fake life insurance” by the friendly insurer. The long (12-year) period of the fake life insurance instruments conveniently allowed some tax evasion statutes of limitations to expire. Unlike real life insurance, these instruments let customers continue investing the money wherever they chose while avoiding significant tax and remaining rather anonymous. Real life insurance that qualifies for German tax breaks must also insure against a risk (the death of the insuree), according to a German law passed in 2009 to tighten up these loopholes. After the 2009 law, said a 2012 S.Z. article, such life insurances bought by Germans had to be reported immediately to the Bundesfinanzministerium [Federal Finance Ministry] when bought in Germany, but when bought outside the country the sellers were only obligated to report them to the German government when the policies were paid out.
The Italians are rumored to have been working for an Italian insurance company called Generali, though that has not been confirmed. Handelsblatt.com heard it was Generali subsidiary PanEurope Ltd., headquartered in Ireland, and added that the scheme had a minimum deposit requirement of half a million euros but prosecutors thought this one had been used to avoid taxation on several hundred million. Reporting on a similar investigation in 2012 of German insurance customers at the Swiss bank Crédit Suisse, Süddeutsche.de said English names for the scheme included “insurance wrappers” and “private placement insurance.”
Commerzbank is only being called as a witness, the bank’s representatives said. They only managed das Depot, which translates as portfolio but has always sounded more like an armored box.
The Green party took advantage of the event to call once more for a German criminal code for companies, in addition to individual people, so that companies can be prosecuted for crimes.
(Fair SHLY ah teh fair MƏG oongs fair VAULT oongs fair TRAY geh.)