FCA move to London causes ‘economic damage’
03 July 2019
3 July 2019
The decision by Fiat Chrysler Automobiles (FCA) to move its financial and legal offices out of Italy has cost the country between €4 and €7 billion.
The loss comes in the form of lower Italian tax revenue and was reported by the national competition watchdog earlier this week.
Antitrust head Roberto Rustichelli complained about ′the significant economic loss of state revenues’ caused by the move in an annual report to the country’s parliament.
′Italy is one of the most penalised countries,’ from fiscal competition, he continued.
The carmaker has moved its fiscal headquarters to London, whereas its parent company Exor has also relocated its legal and tax office to The Netherlands.
The move by the carmaker is part of its pan-European strategy – by spreading itself across the continent, it hopes to have a wider influence outside of its home nation.
As part of this strategy, FCA proposed a merger with Renault last month. The deal broke down after the French Government proved difficult to come to terms with.
′It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,’ Fiat Chrysler said in a statement.
FCA’s shares dropped by 3% in the wake of the merger being cancelled, according to Reuters.
′With FCA pulling its merger offer, one has to wonder how much the French state is set on limiting Renault’s strategic and valuation opportunities despite having only a 15% stake,’ analysts at brokerage Jefferies wrote in a note.