Italian Industry Minister Flavio Zanonato will meet with Fiat chief executive Sergio Marchionne over concerns that he plans to transferr the headquarters of the carmaker and Fiat Industrial away from Italy, Il Sole 24 Ore reported. Zanonato told the Italian daily that he will press Fiat’s CEO over Italy's future role at the two companies.
Fiat Industrial is planning to move its fiscal headquarters to the United Kingdom after consummating a merger with tractor unit CNH Global NV to save on its annual tax bills. Fiat Group, on the other hand, is considering shifting its corporate headquarters from Turin, Italy to the United States after completing a merger with American subsidiary Chrysler Group, reports have indicated.
The possible transfer of the two companies away from Italy has raised concerns among labor leaders, who in turn have pressed the Italian government to take action to secure jobs in the country.
Such move is considered very sensitive as unemployment in Italy is reaching a 20-year high. Marchionne has remarked that he is considering primarily listings for Fiat Group and Fiat Industrial in New York City to gain better access to capital markets. The company said in a recent filing with the Securities and Exchange Commission that the merged Fiat Industrial-CNH plans "to operate in a manner to be treated as resident in the United Kingdom for tax purposes."
The merged entity, meanwhile, will have its corporate headquarters moved to the Netherlands, according to the filing. In a statement released Wednesday, Fiat Industrial said that a fiscal domicile in the UK will place shareholders of the new entity on the same level with investors of its main rivals. The UK has been cutting its corporate tax rate in recent years, from 30 percent in 2007 to 20 percent in 2015. On the other hand, the corporate tax rate in Italy is 31.4 percent.