German CFC Rules rank among the oldest in the world. They have been in existence for more than forty years. Today, the body of CFC rules is increasingly accused of being outdated, vague and ambiguous, and no longer in alignment with the needs of a modern globalized world economy. Consequently, not only tax payers and their advisors but also tax authorities and tax courts face dramatic und partly unsolvable application problems. Some particular German CFC-provisions have been said to be inapplicable by all parties involved. With this background in mind, the following article revisits the most challenging problem areas and offers possible solution approaches. Our paper also identifies possible tax risks in connection with the German CFC legislation and therefore may turn out for investors as a decision making support tool.
Intertax