According to the head of the tax department in the Federal Ministry of Finance, the Hamburg tax authorities took an unusual legal view in 2017 in the case of the Warburg Bank involved in the “Cum-Ex” scandal. Even after his instruction to prevent an imminent statute of limitations for a reclaim of wrongly refunded capital gains tax of 43 million euros, the authority asked him to reconsider the decision, said Rolf Möhlenbrock on Friday in the parliamentary investigation committee of the Hamburg Parliament. "The Hamburg colleagues had their own legal opinion on the subject of cum-ex."

The gap between the legal opinions of the ministry and the Hamburg authorities "was so large, so unusually large, that we felt compelled to issue instructions".

This is an unusual step, said Möhlenbrock.

"It doesn't happen all that often." It's only happened four or five times since 2010.

At the time, Möhlenbrock was a sub-department head in the ministry.

“It happens extremely rarely”

The department head at the time, Michael Sell, also described such intervention by the ministry as unusual. "It happens extremely rarely," he told the committee.

The BMF intervenes “in very, very rare cases” in a specific tax procedure.

In September 2017, as part of an annual "Cum-Ex" survey by the ministry, the Hamburg tax authorities reported the Warburg Bank for the first time as a suspected case with a possible loss of 180 million euros.

The opinion of the Hamburg tax authorities at the time, not to raise the reclaim for 2010 over 43 million euros despite the imminent statute of limitations, since the "Cum-Ex" transactions could not be proven beyond a doubt to the Warburg Bank, was incomprehensible to him, said Möhlenbrock.

Especially since in such a suspicious case the burden of proof lies with the taxpayer, as the Hessian tax court had ruled.

The overall picture of the transactions in question was one "that strongly suggests a cum-ex design".

The argument of the Hamburg, in the case of a wrongly raised claim for damages, "I found absurd," said Möhlenbrock.

He called the accusation that his instruction was a political decision "nonsense".

Damage sum of four to five billion euros

In "cum-ex" deals, financial players moved large blocks of shares around the dividend record date in an elusive system and then claimed back taxes that were never paid.

According to Möhlenbrock, the amount of damage caused by such "cum-ex" transactions is between four and five billion euros.

About half of the taxes have already been refunded;

around two billion euros are still open.

The committee of inquiry is to clarify the accusation that leading SPD politicians may be influencing the treatment of the Warburg Bank. The background to this is meetings between the then Mayor of Hamburg and current Chancellor Olaf Scholz and the co-owners of the bank, Max Warburg and Christian Olearius, in 2016 and 2017. Olearius was already being investigated at the time on suspicion of serious tax evasion. After the first meeting, the tax office for large companies initially waived additional tax claims of 47 million euros when the statute of limitations expired in 2016.

Möhlenbrock and Sell agreed that they had no knowledge of any possible influence by Scholz or the then finance senator and current mayor Peter Tschentscher.

There was also no contact between the two of them and the Ministry of Finance at the time in question.

Scholz had stated before the committee that he could no longer remember the meetings with Warburg and Olearius, but ruled out any influence.

Keywords: