If a foreign corporation has passive income and is taxed at a lower rate than in Austria, the so-called “switchover” from the exemption method to the credit method will occur. In this event, dividends and capital gains are not tax exempt in Austria; foreign taxes can be credited. With the Annual Tax Act 2018, this “switchover” was modified and integrated into the new CFC regime under Sec 10a Austrian Corporate Tax Act (CTA). The decisive criteria for both mechanisms are passive income and low taxation. In the following, Norbert Schrottmeyer explains how both key elements should be interpreted, with a focus on the “switchover”, and attempts to shed light on some questions posed by the new tax regime.