A prominent German tax professor is urging the newly formed federal government to intensify its efforts to combat so-called “cum-cum” share transactions, which he estimates have cost the state billions of euros.
Professor Christoph Spengel, speaking to the “Süddeutsche Zeitung”, criticized what he described as a minimization of the issue by political leaders. He contends these transactions have resulted in damages exceeding 25 billion euros. “The claim that everything is under control and the damage isn’t as significant – it’s as if they’re saying ‘no harm done’ – is deeply frustrating. It cannot simply be dismissed” he stated.
Spengel expressed particular concern that “cum-cum” deals remain feasible despite what he deems a relatively straightforward solution. “Therefore, I appeal to the federal government to finally take legislative action and close the existing loophole”. He also highlighted the incongruity of political restraint given current budgetary constraints. “The previous federal government collapsed over a dispute regarding five billion euros in the budget, while tens of billions of euros are lost each year due to tax fraud” he added, describing this prioritization as “extremely negligent.
“Cum-cum” transactions permit foreign investors, with the assistance of German financial institutions, to reclaim capital gains taxes despite lacking a legitimate claim. While the federal government currently estimates the damage at over seven billion euros, Spengel calculates it to be nearly 28.5 billion euros. He drew comparisons to the “cum-ex” scandal, noting a similar initial tendency to downplay the extent of the issue. The “cum-ex” scandal occupied the media and judicial system for over fifteen years, placed former Chancellor Olaf Scholz under scrutiny and resulted in several prison sentences. Spengel previously served as an expert witness in the “cum-ex” investigation committee in 2016, where he quantified the scale of the damage.
