BaFin estimates €7 billion tax‑scheme losses for German banks, insurers and securities firms

Germany’s financial regulator BaFin disclosed that institutions involved in the Cum‑Cum and Cum‑Ex dividend‑tax schemes face a total potential burden of €7.01 billion. The loss breaks down into €4.82 billion from Cum‑Cum arrangements and €2.20 billion from Cum‑Ex transactions.

The assessment covers 73 banks, 21 insurers and 12 securities‑service firms. Of the total amount, 59 % has already been paid while the remaining 41 % represents future liabilities. Companies have set aside reserves of €638 million for Cum‑Cum and €288 million for Cum‑Ex.

Cum‑Cum involves foreign shareholders temporarily transferring shares to domestic investors before the dividend record date to avoid German withholding tax, after which the shares revert to the original owners. Cum‑Ex adds rapid trading of the same shares around the dividend date, creating the appearance of duplicate ownership and resulting in multiple tax‑refund claims.

While the Federal Court ruled in 2021 that Cum‑Ex constitutes criminal tax evasion, Cum‑Cum remains legally ambiguous. BaFin said it will deepen its examinations of the affected institutions, focusing on governance, tax‑risk management and the role of senior executives.