The Italian Tax Authorities challenged FCA Group about its exit tax on year 2014 assuming a EUR 5.1bn underestimation of the value of their business when they moved the headquarters in the Netherlands in 2014 and therefore demanding a tax bill of EUR 1.4bn. We attach a Wall Street Journal article by Eric Sylvers with comments to our Luigi Belluzzo.

This initiative will follow its path procedure, according to Italian tax laws and regulations.

What it is relevant as a general comment is that the Tax Authorities are not following the (usual) path of deemed residence or permanent establishment, de facto recognising the substance of the business combination between Fiat and Chrysler: It is considering the fair (tax) value of the involved assets.
A (relatively) new approach, perhaps with some similarities to the Dolce & Gabbana case, where the value of the brand was under discussion.

This is an interesting case and it will lead the way on Italian tax rules under the influence of the European directives and precedents of the European Court of Justice. We will monitor closely on how this is going to develop.

Our firm in Italy has a specific Focus Team on controversy and rulings. The tax team is always ready to defend foreign and domestic taxpayers with tax pre-litigation or tax litigation.

Read the Wall Street Journal article HERE

Our controversy tax Team HERE