The anti-treaty shopping rule of Sec. 50d (3) of the German Income Tax Act, which has been subject to much controversy and has been amended and tightened repeatedly since its introduction, has been amended yet again as a result of the formal EU treaty violation proceedings initiated against Germany by the Commission. The new rule has eliminated the 10% threshold but has introduced a complex rule allowing a pro-rata relief on a case-by-case basis. The elimination of the 10% threshold will only mean an improvement for a handful of foreign companies. Only if the "good" income of the foreign company does not exceed 10% of the foreign company¹s gross earnings will the new rule grant pro-rata relief. In many cases, the new rule will mean a tightening of the previous legislation. In addition, the new rule will lead to significant additional documentation obligations and a permanent monitoring of income streams and activities of the foreign company.