FCA challenges Italy tax agency over value of U.S. business
Reuters
Published Dec 05, 2019 09:30
FCA challenges Italy tax agency over value of U.S. business
MILAN (Reuters) - Fiat Chrysler Automobiles (FCA) (MI:FCHA) has challenged Italy's tax authority which has said the car company had underestimated the value of its U.S. business after it bought Chrysler.
On Wednesday, a source close to the matter said the Italian tax agency believed FCA had underestimated its business in the United States after its phased acquisition of Chrysler by 5.1 billion euros.
"We strongly disagree with this preliminary report," an FCA spokesperson said on Thursday.
The tax audit comes at a delicate time for the carmaker which is finalising talks with PSA (PA:PEUP), the maker of Peugeot and Citroen, over a planned $50 billion (39 billion pounds) merger to create the world's fourth-largest automaker.
The audit, which concerns transactions dating back to 2014, could result in FCA having to pay back taxes for $1.5 billion, the source said.
"We are confident we will successfully make the case for a material reduction in the assessment," the FCA spokesperson said.
In its third-quarter report in October, FCA said Italy's inland revenue had issued the company with a final audit report in October this year.
If confirmed, the audit could result in a material proposed tax adjustment relating to the 2014 merger of Fiat into FCA NV, it said.
"Any remaining taxable gain assessed would be offset by carry forward tax losses with no material cash outflow or impact on earnings," the FCA spokesman said on Thursday.
At 0944 GMT FCA shares were down 0.7%.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.