BaFin initiates cause-related examination of DekaBank's 2024 consolidated financial statements

In the consolidated financial statements, DekaBank had recognized tax refund claims against the tax authorities from capital gains tax totaling 478 million euros. According to BaFin, the claims relate to securities trading transactions around the dividend record date from the years 2013 to 2018, whose crediting was denied by the tax authorities.

Background

Background

Legal basis of the examination

Under the IFRS standard, tax-related refund claims may only be recognized in accordance with International Accounting Standard (IAS) 12.12 and the interpretations IFRIC 23.9 and 23.10 if it is more likely than not that the tax authorities will accept the company's tax treatment. BaFin explicitly states within the framework of the financial statements control examination that it examines „nicht die steuerrechtliche Wirksamkeit der Aktienhandelsgeschäfte als solche, sondern die bilanziellen Voraussetzungen, unter denen solche Steuererstattungsansprüche aktiviert werden dürfen".

Legal basis of the examination

Cum-Cum in focus

The legal basis for the cause-related examination is Section 107 (1) sentence 1 of the German Securities Trading Act (WpHG). Pursuant to Section 107 (1) sentence 5 WpHG, BaFin is obliged to announce initiated cause-related examinations. „Hat die Bafin konkrete Anhaltspunkte für eine fehlerhafte Rechnungslegung, muss sie eine anlassbezogene Prüfung bei dem betroffenen Unternehmen einleiten", the authority stated in this regard.

According to its own statements, BaFin takes into account the legal opinion of the responsible tax authorities, the Federal Ministry of Finance, and the relevant case law. The examinations are generally carried out by BaFin auditors.

DekaBank's response

Cum-Cum in focus

Transparency through the FISG

The transactions in question are so-called Cum-Cum securities transactions, which are related to illegal Cum-Ex transactions and, according to estimates, have caused the treasury damage of around 28 billion euros. While Cum-Ex involved the refund of capital gains tax that had never been paid, banks generated tax advantages for foreign holders of German shares in Cum-Cum deals by temporarily transferring shares shortly before the dividend record date to domestic banks or funds that could have the capital gains tax due refunded. Such transactions were also widespread among savings banks (Sparkassen).

DekaBank, which acts as a securities service provider for the savings bank sector, has since repaid the almost 500 million euros to the tax authorities that originated from the disputed Cum-Cum securities transactions. The institution also confirmed the initiated BaFin examination.

DekaBank's response

DekaBank expressed confidence: „Die Dekabank ist davon überzeugt, dass sich ihre Bilanzierungspraxis nach Abschluss der Prüfung weiterhin als IFRS-konform herausstellen wird", the institution declared. Regardless of the outcome, BaFin will inform the public about the examination result.

Transparency through the FISG

Through the Act to Strengthen Financial Market Integrity (FISG), BaFin has been able to inform the public earlier and more transparently about its approach to financial statements control since 1 January 2022. „Mit der Bekanntmachung einer Prüfungseinleitung macht die Bafin die Arbeit ihrer Bilanzkontrolle transparent. Das bedeutet aber nicht zwangsläufig, dass eine Rechnungslegung tatsächlich fehlerhaft ist oder dies voraussichtlich festgestellt wird", the authority clarified.

The examination of DekaBank is thus part of a broader review of Cum-Cum transactions by financial supervision, without this implying a final assessment of the institution's accounting practices.