From Bloomberg’s Zachary Mider comes a new allegation regarding the restructuring of (formerly) American parts maker Delphi: the Treasury Department under Obama helped the company re-incorporate in England as part of a tax avoidance strategy. If that’s true, it’s an embarrassing revelation for a President who recently condemned American companies that incorporate abroad as “corporate deserters.” Like many things in the financial world, however, appearances are often deceiving.
Now that Sergio Marchionne has succeeded in joining Fiat and Chrysler together, for his next act he’s planning on moving Fiat’s headquarters out of Italy. While such a move has tax advantages, it would present a political and public relations challenge for Fiat and Marchionne in their home country. According to Reuters, the new entity, dubbed Fiat Chrysler Automobiles, will be a Dutch-based company with a UK tax domicile, while shares are listed on the NYSE with a secondary listing in Milan.
Marchionne is aware that locating the headquarters outside of Italy, where Fiat has operated for 115 years and has received government funding, or outside the United States, where Chrysler was bailed out by the federal government, could make waves and there is the possibility that the Italian government might intervene. “I’ve seen weirder things happen,” Marchionne said to journalists at the recent Detroit auto show. “So I sincerely hope they don’t create obstacles.” (Read More…)
On Tuesday, the Brazilian government said that tax breaks on cars will be slowly rolled back next year, according to a report by Reuters. The government has to make up for billions in lost revenue that has harmed Brazil’s finances this year and had previously announced that it was going to revive the industrial products tax, known as IPI, charged on cars and other manufactured goods. Though many analysts expected an immediate return to the former 7% tax on new cars, the government decided to phase the taxes in gradually, starting with an increase in January from 2% to 3%. (Read More…)
Federal taxes on highway fuels haven’t been raised in 20 years. Because of inflation and better fuel economy, the Highway Trust Fund, into which those taxes flow and out of which transportation funding is dispersed, faces a shortfall. Standing next to labor, construction and business leaders, Rep. Earl Blumenauer (D-Ore.) announced that he has introduced legislation that would raise the federal tax on gas to 33.4 cents per gallon and on diesel to 42.8 cents.
“Every credible independent report indicates that we are not meeting the demands of our stressed and decaying infrastructure system — roads, bridges and transit,” Blumenauer said. “Congress hasn’t dealt seriously with the funding issue for 20 years,” the congressman continued. “With inflation and increased fuel efficiency, especially for some types of vehicles, there is no longer a good relationship between what road users pay and how much they benefit. The average motorist is paying about half as much per mile as they did in 1993.” (Read More…)
Although Jaguar Land Rover has made tentative forays into building cars in India (such as building the Jaguar XF from CKD kits), the British luxury group, now owned by Tata, is apparently on the cusp of establishing full production in India.
I have a mild obsession with license plates. Which is to say that I often pay extra for those special plates that I think look cool, but no one else ever notices. I also know a lot of weird license plate-related facts. Like, for example: did you know the last number in a Massachusetts plate corresponds to the month it expires? I proudly trot out that one every time I see a Masshole on the road. Surprisingly, my passengers never seem quite as intrigued as I am.
Occasionally, there are benefits to my license plate obsession. For example, I can always spot cars owned by annoying acquaintances in restaurant parking lots, which spares me from actually having to speak to them. And I have the immense honor of being the go-to person whenever my friends have a registration-related query.
One of the questions I get most commonly is: why do so many expensive cars have Montana license plates? And so, I will now answer that, virtually assuring that TTAC will lose the wealthy exotic car owner and Montana attorney readership, but perhaps gain a following among county tax commissioners.
For all intents and purposes, Porsche is part of Volkswagen. Except for one niggling detail: Officially, Porsche still owns Volkswagen, and not Volkswagen Porsche. See complicated graph. Volkswagen had planned to swallow Porsche whole, and to add it to Volkswagen’s large collection of brands, but there were some nasty details. The most worrisome detail is solved: The tax bill. (Read More…)
Brazil has historically been a difficult place to do business. The government keeps foreigners out as best as it can, and that extends to vehicle importers as well. In the car business, you are welcome to market your wares as long as you build locally. Imported cars have always been expensive, and the costs are set to rise, as the government has taken new measures that affect both local makers and importers. Read this very closely before you ask for import restrictions into your country. (Read More…)
The Brazilian government must have borrowed several chapters from Vladimir Putin’s playbook on industrial policy. Reuters has it that the Brazilians are using the same strong-arm tactic as Russia: Invest heavily in-country and steep taxes on imported cars will go away. Don’t invest in Brazil and kiss your bunda adeus. (Read More…)