On 28 June 2007, the Italian tax authorities issued Ruling No. 147. The Ruling relates to the availability of a foreign tax credit where a final withholding tax on interest has been levied in a black listed country.
(a) Facts. A company resident in Italy for tax purposes (the Purchaser) purchased bonds issued by a company resident in Gibraltar (the Issuer). The Issuer is indirectly controlled by an EU company. The cash collected by the Issuer for the sale of t…