German tax authorities are investigating Barclays over the use of a legal loophole that cuts its tax bill in the country by hundreds of millions of Euros, a German newspaper Sueddeutsche Zeitung reported.
The publication said German authorities obtained internal bank documents dated 2007-2010 in which Barclays mapped out lucrative tax loopholes related to naked short-selling transactions before and after the dividend payout dates of stocks.
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With the help of a trading platform it operated in Luxembourg, Barclays obtained more tax credits than the tax it actually paid in these transactions, the paper said.
The trades took place for more than 10 years until 2012 and saved Barclays up to EUR280 million of taxes annually, the publication added.
Authorities are now investigating whether taking advantage of these loopholes amounts to tax evasion and whether back taxes are due.
Barclays said in a statement that in relation to the transactions in question it "has an open and constructive approach to engagement with the relevant tax authorities and is committed to continuing to do so."
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By GlobalData"We have complied with all applicable laws and do not accept any suggestion of misconduct."
The German finance ministry declined to comment.
