Banks steal 55 billion euros from EU state treasuries and taxpayers foot the bill
By ALEX KING
VoiceOfEurope.com
21 October 2018
A report on Thursday by investigative journalist organisation Corrective, French newspaper Le Monde, and German broadcaster ARD has revealed a banking scheme stealing billions from EU states, with taxpayers footing the bill.
According to the report, banks have stolen an estimated €55 billion from the national treasuries of eleven countries, including Belgium, France, Germany, the Netherlands, Norway, and Switzerland.
This value is much higher than previously thought, as the German finance ministry originally thought somewhere between €5.3 billion to €30 billion.
The cum-ex scheme involves a process known as dividend stripping, whereby fraudsters buy shares for a short period of time before dividends are declared (cum-dividend) and then selling afterwards (ex-dividend), allowing those involved in the scheme to multiply tax refunds paid only once on dividend payouts.
The bill is then split among shareholders, with the state treasuries paying their way.
As the shares are bought and sold several times in such a short period of time, the authorities are unable to track the culprits.
The scheme has drawn attention to a wider problem facing Europe – tax fraud.
The EU Commission stated in early 2018 that it is committed to tackling tax fraud and is taking measures to combat companies and high net worth individuals avoiding paying their fair share of tax, but the problem still remains.
The Commission estimates that €50 billion €70 billion are lost every year to tax abuse, and so far, a solution does not seem to be in sight.
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