Freshfields Bruckhaus Deringer's Frankfurt office has been raided for the second time in little more than a year, after German authorities extended their investigation into the magic circle firm's involvement in a long-running tax scandal.

The firm confirmed that its offices were searched in mid-November, in what it described as a "limited extension" of an earlier search last October.

The investigation centres around so-called 'cum-ex' transactions, which were allegedly used by a number of banks to claim multiple refunds of tax that had only been paid to the German authorities once, before a loophole allowing such practices was closed in 2012.

The loophole effectively allowed two parties to claim ownership of the same shares, enabling both parties to receive the rebates.

In October 2017, German newspaper Sueddeutsche Zeitung reported that Freshfields' Frankfurt office had been raided in relation to an opinion on tax matters that the magic circle firm prepared for Canada's Maple Bank, the German arm of which was closed in 2016.

Freshfields said in a statement: "Rooms in our Frankfurt office were searched in mid-November in connection with investigations conducted by the chief public prosecutor. This search was a limited extension of the search conducted in October 2017 and both related to a former mandate of our firm. Our advice always complied with the applicable law."

The latest development was reported by German newspaper Handelsblatt Global, which said the scandal has cost the German public about €12bn (£10.6bn). A number of high-profile German banks have reportedly been caught up in the scandal, including HSH Nordbank and LBBW, as well as Commerzbank, Deutsche Bank and BlackRock's Munich offices.