German officials probe Barclay's tax loophole use

24 June 2013

Tax authorities in Germany are investigating UK-based Barclays over the use of legal loopholes, which reduced the lender's tax bill by billions of euros.

The Daily Sueddeutsche Zeitung said the authorities have obtained internal bank documents from 2007-2010, which show Barclays mapped out several lucrative loopholes in order to save money on tax.

According to the newspaper, Barclays used a trading platform it operated in Luxembourg to obtain more tax credits than the amount it actually paid in these transactions. The trades reportedly took place for more than a decade until 2012 and saved the company up to €280 million ($367 million) of taxes annually.

In a statement, Barclays said it "has an open and constructive approach to engagement with the relevant tax authorities and is committed to continuing to do so" in relation to the transactions in question.

Barclays was told last week it must plug a £3 million ($4.6 million) gap in its balance sheet by the financial regulator.

By Asim Shah

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development