Reuters: Regulatory News: UPDATE 1-Fiat Industrial seeks UK residence to cut tax bill

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UPDATE 1-Fiat Industrial seeks UK residence to cut tax bill May 21st 2013, 10:26 Tue May 21, 2013 6:26am EDT * Group wants to move tax residence to UK from Italy * UK has cut corporate tax rate to 20 pct from 30 pct * Fiat Industrial paid 36 pct effective tax rate in 2012 By Jennifer Clark MILAN, May 21 (Reuters) - Truck and tractor maker Fiat Industrial intends to move its tax residence to the UK from Italy after its planned merger with unit CNH, according to a filing with U.S. regulators, a move that would lower its tax bill. Fiat Industrial paid 536 million euros ($689 million) in tax last year at an effective rate of 36 percent, according to its financial accounts, plus a 28 million euro payment for a regional tax, on a net profit of 921 million euros. The UK has been cutting its corporate tax rate sharply in recent years, from 30 percent in 2007 to 20 percent in 2015. Moreover, the UK relaxed its "controlled foreign company" tax rules from the start of 2012 to attract companies to base their headquarters in Britain. Under the new rules, companies are only taxable on profits generated in Britain and not on profits earned overseas. At the same time, the UK government has been critical of international companies that make billions of pounds of sales in Britain, but pay little tax because they are based elsewhere. Fiat Industrial plans to merge with CNH and then fold both companies into a new group provisionally called FI CBM Holdings N.V. with a primary listing on the New York Stock Exchange. The group filed a preliminary prospectus on May 14, and expects the merger and listing to be completed in the third quarter of 2013. Fiat Industrial's sister company Fiat is also examining a U.S. listing after a planned merger with U.S. automaker Chrysler, in which it owns a majority stake. The company has not said where it will be based after the merger, which is expected to take place by the end of 2014. 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. Fiat Industrial has 15 "significant manufacturing or engineering facilities" in Italy, 12 in the United States, and one in the UK, which is a large tractor plant in Basildon, southeast England, the group said in the document. FI CBM was incorporated in the Netherlands last year for the merger. Its principle executive offices are currently located in Basildon. Link this Share this Digg this Email Reprints

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