In an ongoing investigation into share transactions, the German authorities raided the ABN Amro in Frankfurt.
The investigation concerns cum/ex-transactions. These are sales of shares around the dividend date where both the buyer and seller claim dividend tax back. As a result, tax authorities miss out on income. Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, describes this rather odd system.
According to Kavelaars, this system was laid down in German law. With a certain trick, you could deduct withheld dividend tax from the corporate income tax of two parties. In such a case, there was only one levy with at the same time two deductions. This means that in practice, the dividend tax went to companies instead of the state. This trick cost Germany many billions, but is no longer possible today, Germany has resolved this, says Kavelaars.
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Read the full article on RTL Nieuws, 19 November 2019 (in Dutch.)