Sunday, August 8, 2021

Germany Throws the Book at Tax Criminals

Cross-border Securities Loans Targeted by EU Tax Auditors

Author: David Schwartz J.D. CPA

German courts and regulators have put securities lenders on notice that cross-border withholding tax (WHT) reclaim "schemes" are now "crimes." Recent developments in Germany have cleared the way for sweeping tax audits and potential criminal prosecutions of borrowers and lenders reaching back 25 years. The so-called "cum-ex" trades have been a focus of European regulators, particularly in Germany and Denmark, whose treasuries have been hit hardest by these trades. Lenders are being advised that there is new potential for legal and criminal jeopardy attached to cum-ex securities lending transactions and that principals and their service providers should be ready for heightened scrutiny.

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Monday, March 4, 2013

Proposed Tax Legislation Will Raise a Lot of Eyebrows On Wall Street and in Board Rooms

Author: David Schwartz J.D. CPA
These loopholes are bad policy even in the best of circumstances, but it would be unconscionable to allow them to continue if we can use revenue from closing them to avoid the devastating effect sequestration would have on national security, homeland defense, law enforcement, public safety, education and other important priorities. Sen. Carl Levin (D-MI). 

Amid last week's face-off between the White House and Congress over sequestration, Senators Carl Levin (D-MI) and Sheldon Whitehouse (D-RI) introduced the Cut Unjustified Tax Loopholes Act, also known as the CUT Loopholes Act, or S. 268.  The bill is aimed at curbing offshore tax abuses and strengthening tax enforcement, but also seeks to end excessive corporate tax deductions for stock options, close the blended tax rate loophole for derivatives, and end the carried interest loophole.  These provisions are popular among American voters, but are sure to raise some eyebrows on Wall Street and in US board rooms. 
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