KPMG Germany Webpage
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In a judgement published in March of this year, the Federal Tax Court rebuffed challenges by the German tax authorities to dividend stripping schemes handled through a German broker firm (DB 2000, 600 - 15 December 1999). The transactions involved were of two types. In one case, foreign taxpayers holding shares in German corporations sold these shares to the German broker shortly before the dividend payment date and then repurchased the shares in a separate transaction after the dividend distribution at a correspondingly lower price. In the other case, sale and repurchase were effected on the same day. Also, instead of repurchasing the same shares, the foreign shareholders repurchased newly issued shares not entitled to participate in the impending dividend. In both cases, the sale and repurchase transactions were effected
