On 5 May 2008, the Italian tax authorities (ITA) issued ruling No. 187 according to which the controlled foreign corporation (CFC) rules apply to an Italian company with a subsidiary in Cyprus that carries out an actual business activity through a branch in Dubai (United Arab Emirates). (a) Facts. An Italian company undertook a joint venture agreement with a French and a Swiss company (collectively, the Joint Venture). The Joint Venture won a bid to become sub-contractor for the construction of a high-speed subway (the Project) in Dubai. For the purpose of the Project, the construction agreement explicitly requires the...