The German Supreme Tax Court ruled on April 16, 2016, on the determination of the calculation of foreign income as a basis for the foreign tax credit capability of a German tax resident. In this case, which dealt with the investment income of a German health insurance company, it was clearly stated that the expenses resulting from the set up of insurance technical accruals are predominantly caused by the insurance business itself and thus do not reduce the tax credit capability. However, expenses resulting from the administration of domestic and foreign investments are to be allocated to the income resulting from domestic and foreign investments. Thus, only that portion of administrative expenses allocated to the foreign income will reduce the foreign tax credit capability accordingly. The aforementioned case clarifies the tax credit capability of German health insurers, which was uncertain as of 2003 following a change in German tax laws. Although the decision was issued with regard to a German health insurance company, we believe that there are strong arguments for an application to life insurance companies as well. However, there is still no guidance issued by the German tax authorities on such a simultaneous application and so far no case law is available for life insurance companies.