
The CumEx-Files – How Europe's taxpayers have been swindled of €55B - hansen
https://cumex-files.com/en/
======
raffael-vogler
correctiv.org is producing phantastic investigative journalism on a regular
basis. one of their most important revelations recently was about a pharmacist
who was selling heavily diluted cytostatic agents for chemo therapy. several
people died because of this [1].

really awesome about correctiv is that they not just release their findings -
they really make sure that something is going to be done about it. for example
the government didn't do much about above mentioned case - they didn't even
bother to inform the patients. so correctiv rented a shop in that town
(Bottrop) where people could inform themselves about the matter.

if you want to support them: [https://correctiv.org/ueber-uns/#unterstuetzen-
sie-unabhaeng...](https://correctiv.org/ueber-uns/#unterstuetzen-sie-
unabhaengigen-journalismus).

the one thing I find most concerning about these kind of revelations is that
it seems that journalism is more and more responsible for work police should
be doing.

[1]: [https://correctiv.org/ruhr/alte-apotheke/2018/08/10/trotz-
an...](https://correctiv.org/ruhr/alte-apotheke/2018/08/10/trotz-
angekuendigter-kontrollen-maengel-und-unterdosierung-bei-krebsmedikamenten-in-
nrw)

~~~
inetknght
> _it seems that journalism is more and more responsible for work police
> should be doing_

I think this echoes a lot of _sentiment_ , if perhaps without concrete
evidence, across the world.

How can we solve this?

~~~
ianai
For people in “democratic” countries, get involved in civic duties. Register
to vote, stay informed, volunteer to canvass and spread the word for
campaigns. I donate monthly to causes I care about supporting. Corruption
reform has taken place through these routes.

Edit-pedantry

~~~
cbnotfromthere
_" For people in democratic republic countries"_

So obviously people from the UK, Norway, Netherlands, and Spain should not get
involved /facepalm

~~~
longway2go
First we have to address our ridiculously outdated structure and actually
government sanctioned class system.

Having a queen and a ridiculously nationalist political parties has to be the
most embarrassing parts of being British.

God (lol) divinely gives power to the queen (lol) through birthrite (lol) and
we are her subjects (lol).

It is so deeply offensive that I am meant to he her slave, and its shocking
how much idiots dont think it matters.

~~~
marliechiller
youre not her slave or subject really though are you? you havent been
scrubbing her shoes or done anything at the request of the royal entourage im
guessing. shes just a placeholder for tradition and has no say in anything. so
really, it doesnt matter. stop getting your knickers in a twist over something
so unimportant and irrelevant

------
buboard
It would be nice if they could cut to the chase instead of playing pretend
Dostoyevski.

~~~
0xfaded
To be fair, the journalists put a lot of effort and money into this story. I
think they should be allowed to tell the story as they see fit.

I'm sure the key points will be hashed and rehashed until many of the type of
article you want are all over the internet.

~~~
lobotryas
Sure, but do they also want their story to be read by as many people as
possible?

------
Reason077
_”Tax payers have lost up to €2 billion, that’s nearly €350,000 for every
Danish man, woman and child.”_

You sure about that math, cumex-files?

~~~
GeneralMayhem
Possibly confusion by someone who's used to the long scale? In Danish, as in
most non-English European languages, the cognate of "billion" means trillion
(10^12).

~~~
buboard
> in most non-English European languages

i dont think that's true

~~~
GeneralMayhem
[https://en.wikipedia.org/wiki/Long_and_short_scales#Long_sca...](https://en.wikipedia.org/wiki/Long_and_short_scales#Long_scale_users)

The UK is the only place in Europe where "billion" means 10^9; in Eastern
European languages, there simply isn't an equivalent word, and everywhere else
it means 10^12.

~~~
viraptor
An equivalent word for what? Poland is an EE language and has milion, miliard,
bilion, biliard, etc.

------
PythonicAlpha
The German government did know about this stuff I think from 2002 or 2001 on,
but still did not stop it until around 2012 in Germany and did not warn other
countries, so it went on in those.

I just can not understand, how the government of my country could work this
way. It really borders to actively supporting this scam.

In my opinion, not only the people that have done this (including many
banks!), but also responsible persons in the government or ministries should
take responsibilities.

But in Germany, if you are big enough or in government, you can do nearly
everything without effects.

Banks already have looted the people of many countries in 2008/2009.

~~~
krylon
> But in Germany, if you are big enough or in government, you can do nearly
> everything without effects.

While I sadly agree, I would like to point out that this is true of many
countries.

~~~
PythonicAlpha
I wanted to speak only for my own country, while I sadly think, I must agree.

------
m12k
This reminds me of the way most application developers aren't security
experts, and it's taken decades with a lot of very public hacks for awareness
about the risks to be spread and for a set of security practices and
middleware to evolve (hashed & salted passwords, CSRF mitigation, input
sanitation, etc.), to make it feasible for normal developers to create
reasonably secure applications. It seems something similar needs to happen in
tax administration (and tax law) to make tax systems that are not exploitable.
Maybe a new class of white-hats to "pen-test" the tax systems using loopholes
and shell companies instead of 0-days and scanners?

~~~
vijayr02
The issue is that the tax system is a political/economic construct - so
loopholes will take a very long time to be fixed. In the meantime, the white
hat tax researchers have shown everyone else how to game the system.

------
cbg0
There's a previous discussion for a NY Times article here:
[https://news.ycombinator.com/item?id=18149831](https://news.ycombinator.com/item?id=18149831)

~~~
mrfredward
That NYT article was a lot better for understanding what was happening. I
recommend it over the website here, even though it looks at Denmark instead of
the whole EU.

------
GrumpyNl
Great journalism by FollowTheMoney.( with 12 other countries) Journalism the
way it should be. Independent journalism payed by sponsors.
[https://www.ftm.nl/](https://www.ftm.nl/) , if you are dutch, you should
sponsor them to.

~~~
davedx
Yikes, that site needs an epilepsy warning. :(

------
mmanfrin
I'm sorry, but what an unfortunate name.

~~~
toyg
Knowing bankers’ humour, it’s probably anything but.

------
based2
[https://www.nytimes.com/2018/10/05/business/denmark-skat-
tax...](https://www.nytimes.com/2018/10/05/business/denmark-skat-tax-
scandal.html)

[https://news.ycombinator.com/item?id=18149831](https://news.ycombinator.com/item?id=18149831)

------
Jnr
TL;DR In the old days when space on paper was a limitation, journalism was
about squeezing essence of the story in as few words as possible. Instead they
have come up with some sort of graphical novel.

------
andrewla
This article is very hard to follow to figure out what has actually happened
or what CumEx is.

In the beginning of the article is a rough description of the trade in
question:

> Cum-ex – this is the name German media have given to this scam.
> Internationally the different variants of these trades are known as dividend
> arbitrage.

> Cum-ex and its variant cum-cum were highly complex share deals with no
> economic purpose other than to receive tax ‘reimbursements’ from the state –
> but for tax that had never in fact been paid. This is how it went. The
> participants would lend each other shares of major corporations, creating
> the appearance for the tax authorities that there were two owners of the
> shares when in fact there was only one. The bank which settled the trades
> would then issue a ‘confirmation’ to the investor that tax on dividend
> payment had been paid to the tax office – when in fact it had not. With this
> confirmation in hand, the investors were then ‘reimbursed’ by the state.
> It’s a bit like parents claiming child benefit for two – or more – children
> when there is only one child in the family.

Late in the article we get a description of the origin of the trade:

> The money machine

> According to Frey, an equity trader at a US investment bank came across the
> trade accidentally. He had bought shares that were delivered four days
> later. This interval covered the dividend payment day of the company whose
> shares he had purchased. This profit is taxed in the domicile of the company
> (say, Germany). German shareholders can ask for this tax to be reimbursed
> because they have already paid corporation tax.

> The trader suddenly realised he had this tax payable in his book without
> actually owning the shares. The amount was £50 million. It was a very large
> trade.

> The trader wanted to get rid of these funds that were not his. He approached
> the seller of the shares who had also been reimbursed his tax. The bank’s
> legal department sought professional tax advice to find out how to return
> the money to the tax office. The answer came back: “You can keep it.”

> There is no law that prohibits a multiple tax payout, they said. And if
> something is not explicitly prohibited, it is legal, the tax advisors
> argued. The trader kept the money. And because the tax reimbursement
> happened automatically, the scheme could be repeated time and again.

> All you needed was enough funds to trade the shares for a few days around
> dividend payment date. Or you could even just borrow the shares.

Following "dividend arbitrage", there are a couple of other articles that talk
about it, Bloomberg [1] and ProPublica [2], though it's hard to tell if
they're talking about the same thing or an older version of the scheme. In
Denmark, where there is the most evidence of reimbursement for unpaid taxes,
it looks like the investigations date to 2015 [3].

[1]
[https://www.bloomberg.com/news/articles/2018-05-18/denmark-t...](https://www.bloomberg.com/news/articles/2018-05-18/denmark-
tax-collection-agency-sues-in-new-york-over-refund-scam)

[2] [https://www.propublica.org/article/denmark-is-big-victim-
of-...](https://www.propublica.org/article/denmark-is-big-victim-of-wall-
street-tax-avoidance-deals)

[3] [https://www.thelocal.dk/20150925/danish-tax-authority-
cleans...](https://www.thelocal.dk/20150925/danish-tax-authority-cleans-up-
after-scandals)

~~~
da02
Thank you very much for this. This should be the opening of the article. I
don't know why articles start like novels. With so much information being
published nowadays, I would think the start of the article would include a
summary/abstract to help the reader decide to dedicate the time to read the
entire article.

------
Klover
The website could not be worse for mobile. There’s a bar at the top, at the
bottom, the address bar won’t collapse, and to top it all off you can’t use
reader mode to fix it.

------
sschueller
Is something like this also going on in the US? US tax laws are probably just
as complicated as European ones.

------
netsharc
So, they wrote "UBS drive"... is that a typo of USB, or did they get a leak
from that bank?

------
etaty
tl;dr; People asked for task refund on tax they didn't pay.

------
stefek99
TLDR

(saved for later reading)

In my understanding of reality, it's "business as usual".

------
loxs
European taxpayers have been swindled of much more at the moment they paid
their taxes. Who will later steal it once more from the thieves isn't really
that interesting.

------
Abishek_Muthian
Compliance are for small-medium Business & for common people; once a Business
or a person grows too big to fail, paying the fines or bribing the legislators
is the common route in most parts of the world.

I've anguished over this for years and have learned to accept it, depending
upon where you live; this comment might sound entirely absurd.

~~~
maaaats
If GDPR killed a startup it probably wasn't something worth keeping. Being
compliant is sooo easy for small companies, it's mostly just about not being a
dick about privacy.

And I have no idea why you thought bringing this up was relevant.

------
sparkling
The missing transparancy disclaimer: "The Cumex files" is headed by
"Correctiv", a german based "journalist network" which receives large parts of
its funding by german goverment organizations and/or organizations which have
close gov connections. But: the german goverment itself was aware of this
scheme since at least 2002.

Also: this is a drop in the ocean compared to EU-internal tax loop holes and
tax havens such as Luxembourg.

~~~
morsch
A disclaimer implies there is something to disclaim, such as a financial
conflict of interest - what reason for a disclaimer are you imagining?

Besides, they literally have a link to a page with detailed financial
information, including every organization that gave them more than 1000 EUR to
them.

Most of their funding in 2017 came from private parties not affiliated with
any government. I can't find any numbers for 2018, which is a shame.

[https://correctiv.org/en/about-us/](https://correctiv.org/en/about-us/)

~~~
buboard
The article may for example be intentionally be silent on
inefficiency/misbehavior of tax authorities.

~~~
matt4077
Your conspiracy seems rather incompetent if they chose to use their money to
silence their critics on some aspects, _considering they financed that very
investigation in the first place_.

