Huge tax evasion scheme undergoing German investigation
In a recent investigation concerning serious tax evasion and money laundering connected to “dividend stripping”, German prosecutors searched the offices and residences of clients linked to the Canadian “Maple Bank”.
A number of almost 300 investigators searched 30 premises in several German states last week, in order to obtain evidence against 11 people thought to have illegally claimed more than €100 million in tax paid using a strategy known as dividend stripping or dividend arbitrage, Frankfurt prosecutors said.
Despite the fact that the prosecutors did not reveal which bank was involved, Maple Bank confirmed these raids. The bank, which is located in Frankfurt, is part of Canada's Maple Financial Group.
The bank wished not to comment on reporters’ questions regarding the on-going procedure, but released a statement: "Maple Bank has thoroughly supported the search operations and has assured the investigating authorities of its further cooperation".
Dividend stripping in Germany has involved purchasing stocks just before loosing rights to a dividend, then selling it, taking advantage of a now-closed legal loophole, which allowed both the buyer and the seller to reclaim Capital Gains Tax.
Other banks, including HVB and HSH Nordbank, have also become involved in investigations into the dividend stripping strategy previously. According to the Sueddeutsche Zeitung, the Maple Bank case may be the largest of all; the loss to tax authorities is estimated to reach around €450,000,000.
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