TU-TESL

• 22

The Fiat Chrysler Group (FCA), which is hoping for a merger, may have to take a ticket before it is happy. According to foreign media reports, Italian tax authorities said that Fiat underestimated the value of the latter by 5.1 billion euros (39.9 billion yuan) when it acquired it in stages a few years ago. Once it merged with Peugeot Citroen Group (hereinafter referred to as "PSA"), FCA would pay a huge fine for the previous acquisition. According to the audit report of the Italian tax bureau, the merger of FCA and PSA will trigger the so-called "exit tax", namely the capital gains tax levied by Italy on the transfer of assets to foreign countries. At that time, the corporate tax rate in Italy was about 27.5%, which means that FCA may have to pay up to 1.5 billion US dollars (10.6 billion yuan), but the negotiation may reduce the tax collection. The FCA currently declined to comment on documents submitted to regulators. FCA said in the document that the company "has the full support of evidence and applicable tax laws, and will actively defend its position". It is reported that the Italian tax authorities issued a final audit report to FCA in October this year. According to people familiar with the matter, the Italian tax authorities valued Chrysler at about 12.5 billion euros (about 97.8 billion yuan), while Fiat announced that Chrysler was worth less than 7.5 billion euros (about 58.7 billion yuan) according to the advice of its consultants; Fiat Chrysler was valued at 201 It made its debut on the New York Stock Exchange in October 2004, when its market value was about 8.3 billion euros (about 64.9 billion yuan). According to the third quarter report of FCA, negotiations with Italian tax authorities will take place within 60 days, i.e. in 2019, and the final assessment will take place at the end of the year. If the two sides fail to reach a settlement, the matter may go to court. "We are not able to reliably assess the likelihood or extent of a loss," the FCA said on October 31 In January 2014, Fiat purchased the remaining 41.5% of Chrysler for $4.35 billion, which means that Fiat's overall valuation of Chrysler at that time was about 6.95 billion euros. Although the tax dispute between FCA and Italian tax authorities has not yet been concluded, for FCA, there are many twists and turns during the merger negotiation with PSA. First, it was sued by GM for the bribery scandal with UAW, and several executives were investigated; then it signed a new labor agreement with UAW for four years, but because of the scandal exposure, FCA workers' interest in the new labor agreement It is also difficult to guarantee the pass rate. Now they are being watched by the Italian tax authorities, and the outcome of the negotiations between the two sides is unknown. A series of events may affect the merger negotiation with PSA to some extent. According to the plan, FCA and PSA will reach a formal agreement by the end of the year, and sign a formal memorandum of understanding on merger in December this year.