At the end of last year, the German Federal Government (Bundesregierung) initiated a draft bill to combat tax avoidance and to amend other tax provisions. At the center of the draft bill is the fight against the concealment of economic activities by means of companies domiciled abroad. The German Federal Council (Bundesrat) decided on its position on this draft and also took the opportunity to propose an amendment of the withholding tax rules for investment funds under the amended German Investment Tax Act applicable as of 1 January 2018 in order to prevent an unintended tax exemption for domestic real estate income in certain multi-level fund structures.