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CumEx leaves Luxembourg taxpayers €2.2 bn short

CumEx leaves Luxembourg taxpayers €2.2 bn short

by Yannick HANSEN 21.10.2021 From our online archive
Estimate by journalists based on "theoretical assumptions", Finance Ministry says
Luxembourg's Finance Ministry
Luxembourg's Finance Ministry
Photo credit: Gerry Huberty

The CumEx tax fraud scheme cost Luxembourg taxpayers 2.2 billion euros over the past two decades, a consortium of investigative journalists reported on Thursday, considerably higher than the German-based platform Correctiv's previous estimate of just 10 million euros.

The total loss of tax revenue in 12 countries - including Germany, France and Belgium - is now estimated to be €150 billion, almost three times the original amount that Correctiv reported in 2018 when it broke the Cum-Ex scandal. The German taxman alone has been defrauded of €36 billion.

"The estimated amounts put forward by the authors for luxembourg are based on theoretical assumptions," the Finance Ministry said in a statement.  Whenever there was the suspicion that tax refunds had been paid irregularly, the tax authorities would notify the prosecution, it also said.

The CumEx fraud involves a network of traders who lend each other shares just before a dividend payment so that each of them can fraudulently benefit from tax benefits. Corrective has compared the practice to child benefit fraud in which children are registered with several families at the same time.

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