Twelve states cost tax evasion a total of 150 billion euros

Revised tax evasion schemes have deprived some large economies of at least € 150 billion in revenue over the past two decades. This was shown on Thursday by a report from the German branch of Correctiv, which followed up on data from 2018, when it estimated these losses at approximately 55 billion euros. The company's experts focused on schemes such as so-called "cum-ex" transactions, in which participants exchange shares to refund unpaid taxes, and "cum-cum" transactions, in which at least two traders out of at least two different countries sold shares to each other to avoid losing dividend tax money. In the report, Correctiv worked with media partners in several countries and with a team at the University of Mannheim in Germany to create a so-called "conservative estimate" that such schemes cost 12 states € 150 billion between 2000 and 2020. According to Correctiv, cum-cum trades have a lion's share of these losses, estimated at € 141 billion, and cum-ex transactions are responsible for most of the rest. The report states that Germany thus lost EUR 36 billion in revenue, France EUR 33.4 billion and the damage to the United States was estimated at EUR 4.9 billion. The transactions caused a scandal and involve hundreds of suspects. A German federal court has dismissed the appeals of two British bankers and upheld the original ruling that the cum-ex transactions used were illegal. Both were convicted last year of multiple tax evasion between 2007 and 2011. They received suspended sentences after agreeing to provide detailed information on a system under which participants exchanged shares to obtain refunds for unpaid taxes. During the trial, the defendants claimed that they simply used a hole in the law. But the judges concluded that the scheme was illegal and "there is no doubt that the actions were premeditated."