Under certain circumstances dividends and capital gains derived from foreign subsidiaries are tax exempt in Austria. A "Switch Over" from the tax exemption to the credit method will occur if the foreign company is qualified as "passive" and the local tax rate is not comparable to the Austrian corporate tax rate. According to the executive order the comparability is given if the foreign tax rate is higher than 15 %. Edgar Huemer and Norbert Schrottmeyer are of the opinion that (1) especially due to the reduction of the Austrian corporate tax rate as of 2005 from 34 % to 25 % and (2) recent developments in corporate tax law in EU member states the foreign comparable rate has to be adapted also.