#ItalianTaxes

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.”

TTAC alum Justin Berkowitz, over at Car and Driver, reports that a government crackdown on tax cheats has resulted in the Italian market for Italian supercars tanking. Ferrari sales went down 50% from 2011 to 2012. Maserati’s Italian sales have dropped 80% since 2009. Lamborghini is apparently selling no more than five cars a month in all of their home country.