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Banking and Investment Funds: Tax evasion

A survey of German Federal Finance Ministeries by the ‘Süddeutsche Zeitung’ showed that a loophole within the tax system was being severely exploited by German financial institutions until it was modified in 2012. This loophole allowed banks and their business partners to receive several times the value of one capital gains payment. In the Bundesland Hessen investigations discovered up to 30 cases with an estimated value of 979 Million Euros. However, this was not limited to the financial institutions in Hessen but also extended to Landesbank Baden-Württemberg (LBBW), the Hypo-Vereinsbank and the HSH Nordbank who are also said to have manipulated the system costing the government millions. Strikingly, both HSH Nordbank and LBBW participated in risky business practices prior to the financial crises and for this reason received large state handouts, of up to 40 Billion Euros. In total up to 50 cases are being investigated and ten of them are considered to be cases of serious tax fraud where prosecutors are being appointed.  The Federal Finance Court will decide this year whether the practices used in the past will be considered illegal.


Original ‘Süddeutsche Zeitung’ article.

Here more information due to the financial institution LBBW.

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