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Denmark fines Germany's North Channel Bank in dividend tax case

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Denmark fines Germany's North Channel Bank in dividend tax case

Germany's North Channel Bk GmbH & Co. KG was fined 110 million Danish kroner for its role in a dividend stripping scheme.

The bank was found guilty of helping other parties defraud the Nordic country 1.1 billion kroner through dividend tax rebates, from which it profited 55 million kroner in fees, Bloomberg News reported, citing a Sept. 23 statement by the Copenhagen-based State Prosecutor for Serious Economic and International Crime.

The fine marks the first verdict in Denmark related to the scheme, which allowed clients to get tax refunds for dividends that were never paid. Tax authorities estimate that the country lost roughly $2 billion between 2012 and 2015 to the scheme, which has hit several European countries including Germany, Austria and Belgium.

North Channel Bank said it accepts the fine but that its current managing directors had nothing to do with the transactions. The bank added that it reached an agreement with creditors that will allow the company to continue its business activities and eventually be sold to new investors.

The Danish government recently demanded that Nordea Bank Abp repay about 900 million kroner in unearned dividend tax rebates that were received by an investor, the report noted.

As of Sept. 23, US$1 was equivalent to 6.79 Danish kroner.