Investigations into cum/ex transactions

News item -

It is common knowledge that the German tax and judicial authorities for some years have been investigating a certain type of equity transaction carried out by a large number of financial institutions before 2012. These so-called cum/ex transactions took place around the dividend dates of the companies whose shares were traded. Parties involved in the transactions in German shares set off German dividend tax against their income tax, without it being clear whether this tax had actually been withheld and paid.

No tax disputes

ABN AMRO’s legal predecessor, Fortis Bank (Nederland) N.V., ABN AMRO and several (former) subsidiaries were directly or indirectly involved in a number of these transactions. This has been the subject of discussions between ABN AMRO and the German tax authorities for the past years. Currently, there are no disputes between the German tax authorities and ABN AMRO relating to these transactions. In May 2010, a number of former subsidiaries were sold by means of a management buy-out. To the extent that they existed for these entities from these cum/ex transactions, all tax obligations have been met and the bank no longer has a provision for the tax risks involved in the transactions. That does not mean, however, that there are no legal risks remaining with regard to these transactions and ABN AMRO has provided for these risks to the extent required on the basis of current knowledge.

Transparent

As a general principle, ABN AMRO always strives to be transparent towards authorities and regulators. In 2016 and 2017, it proactively contacted and provided information on its own involvement in these transactions to the relevant German public prosecutors in Frankfurt and Cologne. German tax and judicial authorities from various German federal states regularly approach ABN AMRO in the context of their investigations, usually to request information. In principle, ABN AMRO cooperates with such requests but will always assess the grounds for the request, taking the interests of all stakeholders into account when deciding whether and how to provide information.

Zero tolerance policy

Since 2010, ABN AMRO has discontinued and sold off any activities involving any risk of it getting caught up in dividend stripping, while also designing policies to prevent and preclude any involvement in such matters. Rejecting any form of involvement in dividend stripping ("zero tolerance"), its tax policy has been rolled out by means of ongoing tax awareness sessions held throughout the bank. At departments most at risk of becoming involved in dividend stripping, this practice has been identified as a key risk and controls have been put in place. Their tax awareness sessions devote extra attention to ABN AMRO’s zero tolerance policy on dividend stripping.

Further information is available in official publications released in recent years as well as on ABN AMRO’s website.

Share

Join the discussion

ABN AMRO would like to know your opinion, so below this article you can react to this article via Disqus. By doing so, you agree to the conditions for reacting to articles on our website.

Related news items

More news about ABN AMRO