Swedish bank SEB said on 15 December it had been hit with a €511m tax demand from the German public prosecutor and its head office in the country was raided during the week as part of an investigation into so-called cum-ex transactions.

SEB said: "To the best of our knowledge, SEB in Germany has not offered or conducted transactions where the purpose is to recover tax that was not paid. We distance ourselves from that type of arrangement.

"As part of this investigation, the public prosecutor has on 14 and 15 December 2021 visited the bank's office in Frankfurt and requested information. SEB is cooperating with the authorities.

"As this is an ongoing investigation, we cannot provide any further comments at this moment in time."

In a separate statement, SEB said as part of its ongoing tax field audit relating to historical transactions until 2015, the tax authority in Frankfurt on 15 December 2021 made an additional reclaim to SEB's German subsidiary DSK Hyp AG of €511m, excluding accrued interest.

"This adds to the previous reclaims that SEB communicated on 22 December 2020. The bank strongly opposes these reclaims and will appeal them.

"As SEB has communicated in its quarterly reports since the third quarter of 2017, German tax authorities are reviewing historical transactions involving the crediting of withholding tax on dividends paid on German shares. The bank strongly opposes the reclaims and its external legal advisor has concluded that the tax authority's previous reclaims should be unlawful."

The bank added that the review relates to transactions that were carried out before a change in Germany's tax legislation came into force in 2016.

"SEB is of the opinion that these were carried out in accordance with then prevailing rules. DSK Hyp will appeal these claims. Hence, to date and in accordance with current accounting rules, no provisions have been made on group level. To date, the tax authority has reclaimed a total of EUR 936m relating to historical transactions involving the crediting of withholding tax on dividends paid on German shares.

"Further reclaims cannot be ruled out, nor that this could have a negative financial effect on SEB.

"The total withholding tax in DSK Hyp's customer business during the years 2008-2015 amounts to approximately EUR 1,500m (of which a total of EUR 936m has been reclaimed by the tax authority to date).

SEB further said the legal proceedings were estimated to take several years as it is expected that the matter will require a decision at least by the German Federal Fiscal Court.