LONDON (Reuters) - Securities and tax regulators should have new powers to share information for cracking down on fraudulent tax reclaim schemes, the European Union's markets watchdog said on Thursday.
The European Securities and Markets Authority (ESMA) made the recommendation in its final report to the European Parliament into frauds whereby investors engineer share trades to make bogus tax reclaims from phantom dividends.
The scams have been a focus in Germany, with the country estimating they have cost the state more than 5 billion euros ($5.8 billion) in lost tax revenue from such schemes, dubbed Cum/Ex and Cum/Cum.
"While halting these schemes seems to be primarily dependant on changes to tax legislation, ESMA considers that increased cooperation between national competent authorities and tax authorities across the EU would be an important step in identifying and deterring abusive schemes," ESMA Chair Steven Maijoor said in a statement.