The S&Ds called today for a thorough inquiry by the European Supervisory Authorities into dividend arbitrage trading schemes such as ‘Cum-Ex’ or ‘cum-cum’ and their impact on the integrity of financial markets, during a vote in the plenary on the CumEx scandal. The S&D Euro MPs condemned tax fraud and the theft of taxpayers’ money and urged member states to bring those responsible for this massive theft to justice, improve national taxation legislation, exchange of information and the enforcement of the tax and financial regulation in Europe.
The CumEx scandal was brought to light on 18 October by 19 European media outlets, which revealed that an organised group of bankers had stolen over €55 billion from the public coffers of several member states over the past 15 years through the so-called ‘Cum-Ex’ deals. It was revealed that bankers, lawyers and other intermediaries were trading shares and receiving tax reimbursements for tax that had never been paid.
Commenting the CumEx scandal resolution, S&D Group vice-president & co-rapporteur in the special committee on tax, Jeppe Kofod MEP, S&D Group spokesperson for the Parliament's special committee on tax, Peter Simon MEP, and S&D Group spokesperson on economic and monetary affairs, Pervenche Berès MEP stated:
“The time for words has elapsed. Now it is time for deeds! Europe cannot afford another tax scandal and another theft of European taxpayers’ money. We need concrete action to combat tax fraud and money laundering in Europe now!
“Today we Socialists and Democrats called for national and European investigations into the financial institutions and the intermediaries involved in the CumEx scandal and better enforcement of financial regulation. Those responsible for the biggest theft of the century must be held accountable.
“At the same, we must address the root causes of this theft. Lack of sincere and effective cooperation among member states’ authorities, systems of exchange of information that have proven their limits and diverging national rules and EU loopholes: all these reasons combined are enabling tax fraud as well as money laundering.
“Tax theft is a crime against society with detrimental consequences for European citizens. Over 55 billion euros were lost not only from the EU public coffers but also, and most importantly, from our welfare systems. Europe can no longer tolerate this.
“To avoid a repeat of the CumEX scandal, we need more transparency, enhanced supervision of the financial markets and coordinated action at the European level. To this end, we urge member states to nominate Single Points of Contact (SPoCs) to facilitate the exchange of information speed up reaction. In addition to this, a reform of the fiscal regime of dividends is necessary for preventing illegal claims of tax reimbursements.
“Lastly, we reiterate our call for an EU Financial Intelligence Unit and an EU Tax Policy Coherence and Coordination Centre. Such a mechanism would ensure that in case of suspicion of international fraud all member states will be alerted and a coordinated and international investigation will start immediately.”