French authorities raided several banks in Paris on Tuesday as part of the “Cum-Ex” tax evasion scandal.
The banks searched included BNP Paribas, Société Générale, HSBC, and Natixis, as well as BNP Paribas’s brokerage firm Exane.
The raids are connected to five preliminary investigations launched in 2021 on alleged money laundering and tax fraud charges related to dividend payments.
- There have also been raids and investigations in Germany connected to the Cum-Ex scandal.
- The Cum-Ex scandal was a dividend arbitrage scheme where shareholders transferred stock for a short period to investors based abroad to avoid a dividend tax.
- Investors then held the shares during the period when dividends were paid out and either weren’t taxed or taxes were refunded.
- Investors then sold the securities back to the original owner, and the amount saved was split between the parties.
- The Cum-Ex tax evasion scheme is estimated to have cost EU taxpayers at least €55B (~$60B).
