It has now been two years since the last substantial amendments of the German tax rules for investment funds. Now again everything is on the table, this time it goes to the heart of the matter. What the fiscal authority is asking for is a fundamental change of fund taxation: taxation at fund level on the basis of a source historically used for non-residents, however, plus the traditional taxation based on residence for German investors in the fund. Thus, conflicts with souvereignty of taxation between Member States of the European Union are resolved to the advantage of the national tax authorities instead of supporting a European-wide solution regarding the question of whether to base fund taxation either on the source or on the residence principle.