Cum-Ex-Geschäfte

“Cum/ex transactions.” A lucrative tax loophole that major German banks have been using. Spiegel reported the story on 28 Apr 2013, saying it had been broken by the Berlin Sunday version of Die Welt (Die Welt am Sonntag, WamS) but so far search results for it online are only turning up in Der Spiegel. The loophole, estimated to have cost the German government 12 billion euros so far, was created by corporate tax reform legislation of the SPD + Green Party coalition in 2002. Though discovered by officials shortly thereafter in 2002, and reported all the way up the chain of command, the loophole was not fixed by Hans Eichel (SPD) or his successor Peer Steinbrück (SPD, currently running against Angela Merkel for chancellor of Germany). Amendments to the law in 2007 made the situation worse, Spiegel reports that WamS reports. Wolfgang Schäuble (CDU) appears to have waited several years to fix the problem as well, though now the order appears to have gone out.

The problem was this: under certain circumstances capital gains tax could be reimbursed multiple times. After e.g. stocks or bonds were sold short but before they were bought back to conclude the transaction, German bureaucracy sometimes obscured to whom the stocks or bonds belonged: the person loaning the stock, the short seller or the end customer. The question would be trivial, say financial reporters, were it not for the fact that sometimes if the sale occurred right before a dividend the German IRS would erroneously issue more than one get-your-tax-back certificate for capital gains on the stock. Honest people would ignore the unearned get-your-tax-back certificate, but others would deliberately game the system to get the treasury to reimburse them these taxes even conceivably more than five times, said professor Heribert Anzinger of the University of Ulm.

This looks like the dividend stripping loophole HypoVereinsBank and others were reported in 2012 to have used to extract money from the German fiscus. Etymologically, Wikipedia contributors explain, when a company’s general assembly of shareholders decides to issue a dividend, the dividend is usually issued the day after the assembly meeting, called the “ex day” (“Ex-Dividende”). The day before the ex day is called the cum day, for arcane reasons.

(COOM   ECKS   geh SHEFF teh.)

Fantastillionen

“Lots of money,” an “unimaginable fortune,” but no one knows how much yet. The Münchener Abendzeitung reported reports, firmly denied, of account balances totalling several hundred million euros. Uli Hoeneß, the president of German soccer’s version of the NY Yankees, FC Bayern Munich, submitted a Selbstanzeige in January 2013 for unpaid taxes on funds in one or more Swiss bank accounts and has already paid an initial lump sum of about six million in unpaid taxes. He said he didn’t report himself before January 2013 because he was betting the tax agreement with Switzerland would be ratified that provided amnesty, anonymity and a low tax rate for “tax sinners.” Tagesschau.de reports that it’s still unclear where the untaxed monies came from, whether from his bratwurst factory or from other sources.

ZDF heute journal found footage of Hoeneß on talk shows such as the charming Günther Jauch’s in autumn 2012 recommending low taxes for rich Germans because otherwise, he said, they would move to Austria, Switzerland or “who knows where.”

CSU chair Horst Seehofer confirmed on Saturday, 20 Apr 2013, at a CSU meeting in a Munich Hofbräuhaus cellar, that the district attorney was looking into the matter. The CSU had been going to propose Hoeneß as a political candidate, and he probably would have been confirmed.

The Münchener Abendzeitung commented on 20 Apr 2013:

“The question remains whether Hoeneß can now hope for the same support from the Bavarian state government as Franz Beckenbauer, to whom Bavarian finance minister Ludwig Huber once gave tips about tax flight into Switzerland while Huber was still in office?”

Achtung: Focus Magazin’s publisher is on the board of FC Bayern Munich.

(FAHN tossed ill ee own en.)

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