In contrast to the view of the German tax authorities, the Tax Court of Bremen ruled on October 15, 2015, that distributions made from earlier taxed deemed dividend pursuant to the German CFC rules will have to be treated as tax-exempt income for corporate investors according to paragraph 3 no. 41 of the German Income Tax Act. Paragraph 8b section 5 of the German Corporate Tax Act will not apply, so that double taxation will be avoided. This court decision is in line with the spirit and purpose of the CFC rules, which should only hinder the shielding or deferral of income by using a low-taxed foreign corporation (CFC company) but not generate an additional tax burden for German tax payers. The different view of the German tax authorities under which the distribution falls under paragraph 8b section 5 of the German Corporate Tax Act results in a double taxation of 5 % of such distribution. The tax authorities appealed the decision of the Tax Court of Bremen and the case will now have to be decided by the Supreme Court.