Dividend Tax Fraud
Raising Awareness of Dividend Stripping Schemes
Dividend stripping is a type of fraud that is committed through a complex mechanism
of trading, selling and repurchasing shares over a certain period to unlawfully avoid
payment of dividend taxes, or to claim unjustified tax reimbursements. Dividend stripping
in its many forms poses a great challenge to the tax bases of numerous jurisdictions
and may create market distortions that corrode the integrity of the financial system.
This report is intended to raise awareness of dividend stripping frauds and provides
a number of recommendations for countries around recognising the risk, improving domestic
co-ordination and expanding international co-operation. In particular, tackling dividend
stripping requires strong domestic inter-agency co-ordination and international co-operation,
as well as the sharing of information between jurisdictions. Countries may therefore
wish to prepare targeted actions and comprehensive strategies against this phenomenon,
including not only tax administrations and law enforcement, but also financial regulators
and supervisory authorities, as well as anti-money laundering competent authorities.
Legislative changes may also be required in some cases.
Published on December 07, 2023Also available in: French