Share Sales under the German Controlled Foreign Company Taxation Regime – Areas of Concern and Legislative Solutions

In this note, the authors examine the implications of the German Anti-Tax Avoidance Directive Implementation Act and the new German Foreign Tax Act Application Decree for the treatment of strategic share sales under the German controlled foreign company taxation regime. The authors show that the approach taken by German lawmakers is far from perfect, and further amendments to the German controlled foreign company rules may be needed. To this end, possible legislative solutions are presented.