Fiat Industrial plans to move its tax residence from Italy to the UK after the merger with CNH.
In 2012 Fiat Industrial paid 536 million euro in tax at a effective rate of 30% and 28 million euro for a regional tax, on a 921-million-euro net profit. Over the past years the UK has cut its corporate tax rate which was 30% in 2007, aiming for 20% in 2015. Beginning with 2012, in order to convince companies to move their headquarters to Britain, the UK has reduced its “controlled foreign company” tax rules.
According to the new regulation companies have to pay the tax only on profits generated in the UK and not those earned overseas. The UK is also targeting companies which make profits of billions of pounds in Britain but pay small taxes because they are based in other countries.
After the merger with CNH, Fiat Industrial plans to create a new group, called FI CBM Holdings N.V., which will have a primary listing on the New York Stock Exchange. The move is to be complete by the third quarter of this year. Fiat also considers a US listing after its merger with Chrysler, which is to take place by the end of next year.
After its merger, FI CBM “intends to operate in a manner to be treated as resident in the United Kingdom for tax purposes,” the prospectus said.