08.06.2017

Professor Spengel Uncovers Tax Affair with Journalist Team

For the ARD broadcast "Panorama", ZEIT ONLINE and DIE ZEIT, Professor Spengel has calculated the tax losses caused by dishonest Cum/Ex and Cum/Cum transactions and estimated the damage to the German state to more than 30 billion Euro.

Professor Dr. Christoph Spengel

Professor Dr. Christoph Spengel calls it “the largest tax affair in the history of the Federal Republic”. The results of the six-month research conducted by the journalist team of the ARD broadcast "Panorama", ZEIT ONLINE and DIE ZEIT, to which he contributed significant damage calculations, will be shown in the Panorama program on June 8.

Lost Tax Revenues over 30 Billion Euro

With the help of historical financial market data, the owner of the Chair for General Business Administration and Business Taxation was able to numeralize the damage caused by purely tax-driven equity transactions with short selling around the dividend date, which resulted in unlawful tax repayments (so-called Cum/Cum and Cum/Ex transactions). At least € 31.8 billion has been missed out by the German treasury. € 24.6 billion is attributable to Cum/Cum transactions, where a domestic bank helps an investor from abroad to claim tax repayments. The related, but more complex, Cum/Ex transactions, where tax payments are reclaimed several times from the tax office, resulted in a loss of € 7.2 billion. However, Professor Spengel emphasizes in his report that this is the "minimum tax damage [... and the amount] must be interpreted as the absolute lower limit of the resulting tax damage."

Investigation Committee of the German Bundestag uses Spengel’s Report

Professor Spengel has been conducting research on the topic for several years and, together with a co-author, has already published a study on this business practice in April 2015, which excludes the existence of a legal gap on the basis of a tax analysis. The result of the study was that Cum/Ex transactions were never at all consistent with the law and can have criminal consequences. Professor Spengel explained in May 2016: "If there are no other economic reasons other than tax avoidance, then we are considering, according to the literal meaning, the abuse of taxation according to clause 42 of the Tax Regulations." This legal understanding is shared by the German Bundestag, which appointed an investigation committee in November 2015 with Professor Spengel as an expert, to review Cum/Ex transactions carried out between 1999 and 2012.

The Panorama program named "Billions from the State Fund: The Tax Robbers" airs on June 8, 2017 at 10 pm on ARD. Go to ARD homepage. 

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