The German Annual Tax Act 2010 tightens the CFC legislation with regard to foreign jurisdictions (especially Malta) that provide a credit or tax refund at the shareholder level. In Malta, for example, a CFC pays tax at a high rate (thus avoiding the German CFC provisions). Its shareholders, however, benefit from a tax refund, reducing the overall level of taxation significantly. The author highlights amendments to the CFC rules to close this loophole and tax planning opportunities that remain.