Two trends have emerged from the signals being given by policymakers in Canada, the United Kingdom, the United States, Australia and New Zealand on the taxation of outbound foreign direct investment. First, these countries have moved, or are moving, to an exemption system for foreign participation dividends, away from a "taxable with credit" system. Second, the CFC rules in these countries are becoming narrowly focused on specific types of passive income, with increasingly numerous exclusions. This article examines these two trends.