This article deals with the new issues arising in the EU context regarding controlled foreign company (CFC) regimes in respect of tax arbitrage within the Internal Market and distinguishing this from the concept of tax avoidance, based on the redefinition of the EC law concept of abuse of rights. The article, therefore, analyses the debate at three different levels, i.e. with regard to domestic law, tax treaties (both in part 1) and EC law, (in part 2).