The case in question concerned an Austrian private foundation that received dividends that are tax-exempt in Austria in accordance with Section 10 CITA and on which withholding taxes were levied abroad. The Austrian Federal Fiscal Court had to deal with the question of whether it was permissible to offset the foreign withholding taxes against the domestic corporate income tax. It held that the maximum creditable amount was zero because the dividends were tax-exempt in Austria. However, Michael Lang argues that tax exemption in the residence state does not prevent the withholding tax from being offset.
