Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288415 
Year of Publication: 
2020
Citation: 
[Journal:] International Tax and Public Finance [ISSN:] 1573-6970 [Volume:] 27 [Issue:] 6 [Publisher:] Springer US [Place:] New York, NY [Year:] 2020 [Pages:] 1425-1452
Publisher: 
Springer US, New York, NY
Abstract: 
This paper explores withholding-tax non-compliance in the context of dividend taxation. It focuses on a specific type of stock-market transactions around ex-dividend dates, so-called “cum-ex” trades, which caused considerable revenue losses due to illegitimate tax refunds in Germany and other countries. We use a stylized model of the stock-market equilibrium to analyze the incentives of traders on the German stock market and find that cum-ex trades are only profitable for both buyer and seller in the presence of collusive tax fraud. Our empirical analysis of market data for publicly traded German stocks from 2009 to 2015 confirms that transaction numbers of stocks suitable for cum-ex trades show the expected increase shortly before ex-dividend dates in the period before the tax refunding was reformed. In line with the collusion hypothesis, effects on stock-market prices are not found.
Subjects: 
Tax compliance
Tax evasion
Withholding taxes
Collusion
Tax fraud
Tax refunding
Cum-ex trades
Ex-dividend date
Dividend taxes
Capital gains taxes
JEL: 
H26
G12
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.