German Case Could End Blame Game for ‘Cum-Ex’ Tax Schemes

Our partner Dr. Oliver von Schweinitz was quoted in Bloomberg’s BNA International Tax Monitor on a German court decision that “will set the tone in other jurisdictions” as he says.

A Swiss bank will have to repay millions for steering German international retailer Müller Holding Ltd. & Co. KG toward investing in an outlawed dividend-stripping scheme that involved the right to refunds of taxes withheld from dividend payments.

A Stuttgart court Sept. 14 ordered Basel-based Bank J. Safra Sarasin AGDH to repay Müller nearly 45 million euros ($52.6 million) for facilitating ist purchase of 50,000 shares in a foreign fund.

The case is considered good news for multinationals, and is expected to set a precedent in Germany and elsewhere for cases involving parties that took part in controversial “cum/ex” dividend-stripping designs.

[…]

“This case will set the tone in other jurisdictions,” Oliver von Schweinitz, a partner with GGV law firm in Frankfurt, told Bloomberg Tax in a Sept. 17 interview.

“Banks will naturally say they advise everything but taxes, but the court  has said that if taxes are at the heart of the matter, if the whole transaction is about taxes, then the doubts relevant at the time should have been mentioned,” he added.

[…]

Snapshot:

  • Decision “will set the tone in other jurisdictions:” attorney
  • Dividend-stripping scheme was outlawed by German lawmakers in 2012

To read the complete article see attached PDF.

 

Dr. Oliver von Schweinitz  advises entrepreneurs and companies in Hamburg and Frankfurt on national and international tax law as well as commercial and real estate law. His support also comprises advice on project management..

Subjects: banking regulatory law (dual banking legislation, Dodd Frank Act), commercial and tax laws – also with regards to US law, information exchange laws (QI, FATCA, CRS), private equity, real estate and real estate tax law, the taxation of open and closed-end fund

Office Frankfurt, Tel. +49 69 97961-180, schweinitz@gg-v.de