German Finance Sector Faces $8 Billion Bill for Tax Fraud

The regulatory audit reveals the massive scale of the so-called cum-ex and cum-cum transactions, which flourished during the financial crisis. Of the total liability, €4.82 billion stems from cum-cum trades, where foreign investors used domestic intermediaries to bypass capital gains taxes on dividends. The remaining €2.2 billion is tied to cum-ex schemes—a practice that relied on rapid-fire stock trading around payout dates to generate fraudulent tax rebates.

Authorities have spent years attempting to claw back the lost revenue from the 73 banks, 21 insurers, and 12 other firms identified in the survey. These investigations have already ensnared hundreds of individuals, marking one of the largest tax fraud crackdowns in German history.