The European Parliament is calling for the perpetrators of dividend arbitrage trading schemes ('cum ex') - tax advisors, lawyers, accountants, banks - to be brought to justice in order to put an end to "white collar impunity", in a resolution adopted on Thursday 29 November.
This resolution follows the plenary debate in October, which took place a few days after the revelations of a team of investigative journalists on the extent of the CumEx Files tax scandal that allowed European banks to evade tax on stock dividends for more than €55 billion over fifteen years in eleven Member States, while Europe was barely recovering from the financial crisis (see EUROPE 12123).
MEPs call on the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) to "conduct an investigation " into 'cum ex' or cum cum', “dividend arbitrage trading schemes in order to assess the threats they pose to the integrity of financial markets, to determine who is involved in these schemes and on what scale [and] to assess whether there has been a breach of EU or national law". This investigation should make it possible to formulate "appropriate recommendations on [...] the measures to be taken ".
In particular, the European authorities are asked to "consider a ban on taxdriven financial instruments, activities or practices, in particular on dividend arbitrage, if their perpetrators fail to prove that these complex financial arrangements have a substantive economic purpose other than tax avoidance".
Parliament calls on the European Commission to: - amend the Directive on the mandatory exchange of tax information (DAC 6) to require transparency in dividend arbitration schemes; - revise the Directive on parent companies and subsidiaries in order to combat dividend arbitration practices; - draw up "immediately" a proposal establishing "a European financial police within the framework of Europol" with its own investigatory capacities, as well as a "European framework for cross-border tax investigations".
The Commission is also invited to consider whether it would be appropriate to legislate to "establish an EU financial intelligence unit, a European centre for joint investigation work and an early warning mechanism". The same applies to a possible limitation on the use of certain financial instruments ('special purpose vehicles' and 'special purpose entities') whose role in the 'CumEx' scandal has been highlighted.
Lastly, MEPs stress the importance of protecting, at Member State or EU level, whistleblowers who disclose tax fraud, with reference to the current legislative procedure in this area (see EUROPE 12144, 12141). (Original version in French by Mathieu Bion)