This article analyses the recent rulings of the Court of Justice of the European Union in two Danish cases and examines their possible impact on international tax avoidance. These rulings regard limitations of tax benefits related to cross-border dividend payments resulting from the interposition of holding companies in the European Union. From a legal perspective, the authors conclude that the rulings demonstrate the alignment of international tax policies to combat tax avoidance between the European Union and the OECD. The concerted action between the two is implemented by the economic test to counter abusive legal holding structures. From a quantitative perspective, the rulings limit the potential for multinational enterprises to lower their tax burden considerably. The worldwide average potential gain from treaty shopping is reduced from 5.6% to 4.5% when the EU Member States cannot be used on treaty shopping routes. With more countries, the combat against tax avoidance is more effective. However, the fact that some countries have a standard withholding tax rate of zero per cent hampers the combat.