Freshfields Bruckhaus Deringer's former head of international tax Ulf Johannemann has been arrested in relation to a long-running tax scandal, according to a person with knowledge of the situation.

Frankfurt-based Johannemann, who left the firm last week, has been held in custody since last Friday (November 22), the person said.

He is the first to be arrested in the ongoing investigation. The probe relates to the 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.

Earlier this year, Freshfields was sued for €95 million over advice it gave to the German arm of Canadian-headquartered Maple Bank regarding the issue. Maple Bank later collapsed when its financial position became unstable after it had to pay back unpaid taxes.

German authorities have been investigating the wider scandal for several years, raiding Freshfields' Frankfurt office three times in relation to the issue.

A spokesperson for the German Federal Ministry of Finance said its stance remains that the cum-ex transactions are "illegal", adding it is now for the "competent law enforcement authorities to investigate the alleged criminal charges", while adding that tax authorities are still conducting investigations.

A spokesperson for Freshfields declined to comment.