Germany: Santander bank caught up in major tax evasion investigation
19 Oct 2018

Prosecutors in Germany have launched a probe into the role Spanish bank Santander may have played in a widespread tax fraud scheme.

The probe, which has seen the authorities examine the role of other banks, looks at allegations that Santander executed trades that facilitated ‘severe tax evasion’ between 2007 and 2011.

Reuters, which reported the story, explained that the models were created to generate tax rebates.

“A bank would agree to sell a company stock, for example to a pension fund, before the dividend payout but delivered it after it had been paid. The bank and the fund would both reclaim withholding tax,” the news agency explained.

“Sometimes banks sold shares they did not own and agreed to buy them later in a practice known as short selling. The stock was traded rapidly around a syndicate of banks, investors and hedge funds to create the impression of numerous owners, prosecutors say. The profits from the deals were shared.”

It added that, “in order to generate bigger profits, the pensions funds could also buy large volumes of stocks, using loans from banks.”

A Santander spokesman reportedly said that it was “fully cooperating” with the German authorities.

You can claim CPD minutes for this content, by signing up to our CPD Wallet


You must be logged in to post a comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.