€32bn tax scandal rocks Germany

The actions of bankers, stockbrokers, and lawyers will be examined in one of Europe's largest tax probes...

€32bn tax scandal rocks Germany

Thomas Eisenhuth/DPA/PA Images

Germany has been hit by one of Europe's largest-ever tax scandals. The State is estimated to have missed out on €32bn in tax payments.

It has been alleged that an international group of bankers, stockbrokers, and lawyers have collaborated to cheat Germany's taxman.

According to details emerging from German media outlets, banks, and stock brokers traded shares with foreign investors and claimed tax refunds which they were not entitled to.

In a second variation, banks and investors bought and sold shares right before and after dividend payments - exploiting a tax loophole which allowed both parties to claim major tax refunds. This practice was made illegal in 2012.

Whistleblower

This investigation is based on whistleblower data. A group of journalists have collaborated with the University of Mannheim to piece this story together.

Rather than being spotted by German authorities, this scandal has been exposed by an administrative assistant in Germany's revenue office who noticed one US pension fund getting unusually large rebates. With a little digging, she started to uncover more cases.

According to the BBC, "40 German banks and scores of other financial institutions around the world" are involved in the tax probe.

There are now 30 German officials tracing these transactions and building legal cases.