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Israel arrests local Deutsche Bank CEO over VAT
[JERUSALEM] Israel on Tuesday arrested the head of Deutsche Bank's local subsidiary on suspicion of misreporting deals worth more than 550 million shekels (S$208.5 million), the Tax Authority said.
"Boaz Aaron Schwartz, managing director of Deutsche Bank Israel, was arrested today on suspicion of committing Value Added Tax (VAT) offences, including unlawful reporting of transactions to the amount of over 550 million shekels," it wrote in a statement.
It said that Jerusalem magistrates court later freed him on bail.
The statement said that authorities had been investigating Deutsche Bank Israel, Deutsche Global Markets and Schwartz "on suspicion of committing several offences under the VAT Act".
"The companies reported transactions as zero-rated services to foreign residents only, although they also provided service to Israeli residents in Israel which were subject to VAT at the full rate," it added.
In Germany, the parent company said that it and its subsidiary worked according to the law.
"Deutsche Bank in Israel and abroad acts in accordance with the law and strict legal advice," a Deutsche Bank statement said.
"We are cooperating with the tax authorities on this inquiry and will continue to do so."