PARIS (Reuters) -the judicial court of Paris validated Monday morning during a public hearing a fine of 88.25 million euros proposed by the public prosecutor against Crédit Agricole SA to settle a tax dispute linked to dividends.
This fine was proposed within the framework of a public interest judicial agreement (CJIP) between the Public Prosecutor and Crédit Agricole CIB (CACIB), the Crédit Agricole SA financing and investment bank for investigations in several banks launched in early 2023 concerning dividend arbitration practices, also called “cumcum”.
The agreement must still be approved by judge Peimane Ghaleh Marzban, who presented the terms of the agreement during a hearing in the Paris court.
The arbitration of dividends consists for a foreign shareholder on a company listed in France to temporarily transfer, around the date of payment of the dividend, the titles he holds to a French banking establishment, in order to avoid payment of the withholding tax applied to the payment of this dividend.
According to a statement from the bank, the survey has shown that Cacib “had not implemented any system or politician aimed knowingly to encourage its foreign customers to carry out liably and derivatives of securities or derivatives on securities for the purpose of tax fraud” and had “set up internal rules in order to strictly frame operations around the detachment of the dividend”.
“For the period from 2013 to 2023, the PNF considers that a certain number of securities and derivatives on shares and derivative operations constitutes dividend arbitration. These operations have generated income for Crédit Agricole CIB on average equal to less than 5 million euros per year during this period”, specifies the bank
The fine thus includes the return of the income of these operations over the 10 years invested, or 49.03 million euros, and an afflictive part of 39.22 million euros.
(Mathieu Rosemain report, written by Bertrand de Meyer, edited by Blandine Hénault and Augustin Turpin)
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