Withholding-Tax Non-Compliance: The Case of Cum-Ex Stock-Market Transactions

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Details zur Publikation

Autor(en): Büttner T, Holzmann C, Kreidl F, Scholz H
Jahr der Veröffentlichung: 2018
Sprache: Englisch


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 have caused considerable revenue losses due to illegitimate tax credits in a number of countries. We use a stylized model of the stock-market equilibrium to analyze the incentives of traders and show that cum-ex trades differ from tax arbitrage exploiting loopholes. Cum-ex trades can only be profitable for both buyer and seller in the presence of collusive non-compliance. Using the German experience with cum-ex trades as an empirical testing ground, our analysis of market data for publicly traded German stocks from 2009 to 2015 confirms the theoretical predictions. We find an increase in transaction numbers shortly before ex-dividend dates due to cum-ex trading. In line with the collusion hypothesis, the results confirm the absence of effects on stock-market prices.


FAU-Autoren / FAU-Herausgeber

Büttner, Thiess Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Finanzwissenschaft
Holzmann, Carolin Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Finanzwissenschaft
Kreidl, Felix
Lehrstuhl für Betriebswirtschaftslehre, insbesondere Finanzierung und Banken
Scholz, Hendrik Prof. Dr.
Lehrstuhl für Betriebswirtschaftslehre, insbesondere Finanzierung und Banken


Zitierweisen

APA:
Büttner, T., Holzmann, C., Kreidl, F., & Scholz, H. (2018). Withholding-Tax Non-Compliance: The Case of Cum-Ex Stock-Market Transactions.

MLA:
Büttner, Thiess, et al. Withholding-Tax Non-Compliance: The Case of Cum-Ex Stock-Market Transactions. 2018.

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Zuletzt aktualisiert 2018-07-12 um 13:50