Campari holding company reportedly near £350m tax settlement
Lagfin, the Luxembourg-based vehicle that controls Campari, is said to be close to resolving a major tax dispute with the Italian authorities. The proposed deal would end months of uncertainty following the seizure of over £875 million in shares.
Sources in Milan claim that the tax dispute involving Lagfin SCA, the Luxembourg-based holding company that controls Campari, is near resolution.
Reuters reports multiple sources saying that Lagfin, the holding company controlled by the Garavolia family, is close to a settlement with the Italian Revenue Agency in which it will pay approximately €400.
In October the tax authorities seized €1.29 billion worth of Campari shares following a probe into allegedly unpaid taxes.
Under the proposed settlement the payment will be divided into several instalments with the first tranche of €150 million due this month.
No public comment yet from parties involved
Neither Lagfin nor the tax body have commented on the reports but it is believed that Lagfin will fund the initial payment from existing cash sources.
When the shares were seized Lagfin denied any wrongdoing while Campari said it was not involved in the case.
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Background to the dispute
Davide Campari Milano moved its formal registration to Amsterdam in 2020 to benefit from advantageous tax laws and to exercise tighter control of the company through Dutch company law.
A year ago Italian tax authorities alleged Lagfin had committed a ‘fraudulent declaration by means of artifice’ and for ‘administrative liability of legal persons’ between 2018 and 2020.
It indicted as legal representatives of Lagfin Luca Garavoglia, head of the family group and the company chairman, and Giovanni Berto, who leads the Italian branch of Campari.
Investigators allege unpaid exit tax
Investigators say the Garavoglia family company did not pay an exit tax resulting from the cross-border merger between Alicros, the previous holding company of the group, which was based in Italy, and Lagfin, which is legally domiciled in Luxembourg.
They said they found that ‘exit tax’ capital gains of more than €5.3 billion, accrued by the Italian company when it was sold to the Luxembourg company, had not been declared at the time of the merger and that the merger was not a management necessity, but a ploy to take the assets abroad.
Lagfin controls 51.3% of the shares in Campari and 38.8% of the voting rights of Dutch-domiciled Davide Campari Milano NV.
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