The German Federal Tax Court (Bundesfinanzhof) recently published a decision on the scope of the anti-abuse provision contained in Sec. 50d(1a) (now, Sec. 50d(3)) of the Income Tax Law (Einkommensteuergesetz, or EStG; case I R 74, 88/04, decision of 31 May 2005). Details of the decision are summarized below. (a) Facts. The plaintiffs, two Netherlands-resident limited liability companies (BVs), were owned by a holding company resident on the Netherlands Antilles (NV), which was owned by a Bermuda-resident parent company (Ltd.). The group produced television shows and traded in films and film rights. The function of the BVs within the group...