150 billion euros in tax fraud, including 30 in France, five establishments targeted in France... French banks in the eye of the storm of the "CumEx Files", first revealed in 2018. Are concerned the Société Générale, BNP Paribas, Natixis, HSBC and Exane, a subsidiary of BNP-Paribas specializing in financial investments. All these banks would have used the "CumCum" technique to avoid paying certain taxes in France.
Here is the exact definition of the National Financial Prosecutor's Office: "CumCum fraud consists of a foreign shareholder of a company listed in France temporarily transferring, on the days preceding and following the payment of the company's dividend, the securities he holds to a French banking institution", in order to "evade the payment of the withholding tax applied on the payment of the dividend". A foreign client must indeed be subject to a withholding of dividends of 17.2 to 30% depending on the country of residence. A tax payment that is no longer effective if the company that owns the shares is French.
This is therefore the objective of "CumCum": to ensure that when the dividends are paid, it is French banks that own the shares, to circumvent French taxes (and therefore the law), before returning these securities to its original owner. In exchange, the bank can receive part of these dividends...
If, at first glance, the system is legal, French justice plans to counter it: if it can demonstrate that the only purpose of this return trip is to avoid tax, the technique becomes illegal: "Are constitutive of an abuse of rights [...] acts which [...] have no other reason than to evade or attenuate the tax charges normally borne", is it written in the General Tax Code. The tax authorities also explicitly prohibited this practice on February 15.
