MILAN – Fiat Industrial disputed as “absolutely false” reports Wednesday that Italy would lose 500 million euros ($646 million) in tax revenues if it moves its tax base to Britain after it completes a merger with its U.S.-based subsidiary CNH Global NV.
But the maker of heavy trucks, farm and construction vehicles said in a statement that it believed that making Britain its fiscal base would put its shareholders on the same footing as those of major capital goods competitors.
It said it was awaiting a response from authorities in Britain and the Netherlands, where the new company will be legally based, before finalizing the move.
The prospect that Fiat Industrial would move its tax base has raised concern among Italian lawmakers and unions, already concerned that the Fiat carmaker may shift its headquarters to Detroit once it merges with U.S. carmaker Chrysler. The carmaker last week issued a statement saying that moving its headquarters “was not on the agenda.”
Fiat Industrial SpA, which is based in Turin and was spun off from Fiat in 2011, denied that placing the new company’s tax home in Britain would cause “considerable damage to the tax office of our country.”
It said that the that 500 million euros refers to the total tax burden on all its units, including 46 per cent that are based in North America and 11 per cent in Latin America. It said of the 27 per cent in Europe, only 5 per cent are based in Italy.
The new company will be legally based in the Netherlands and traded on the New York Stock Exchange. The merger was approved by the boards of both companies, but is awaiting shareholder approval.
Fiat Industrial said in the statement that it chose the Netherlands in keeping with its goal of “creating a capital goods company able to attract international investors.”