Fiat Chrysler Reach a Consensus with Italy’s Tax Agency

The Chief Financial Officer of Fiat Chrysler Automobiles (FCAU), Richard Palmer announced they had reached an agreement with Italy’s tax agency concerning valuation of its U.S Chrysler business. He said the settlement doesn’t involve cash or penalty.

Two months ago the Italian tax authorities claimed Fiat Chrysler provided a valuation of its U.S business which had been undervalued by $5.6 billion (5.1 billion euros) following Chrysler acquisition.

The agency audited transactions for the U.K based automaker dating back to 2014 which would have left the company with a FCA tax bill amounting to $1.5 billion.

Palmer confirmed the agency had carried out the audit and produced a report which suggested Fiat Chrysler to increase the taxable gain arising from acquisition of Chrysler by Fiat as part of the 2014 merger.

“Under the terms of the settlement we agreed to increase the taxable gain by 2.5 billion euros,” said Palmer.