ITALIAN tax authorities believe that Fiat Chrysler Automobiles (FCA) underestimated the value of its US business by €5.1bn (£4.3bn) following Fiat's phased acquisition of Chrysler, according a source close to the matter.

The audit, which concerns transactions dating back to 2014, could result in FCA having to pay back taxes for $1.5bn (£1.1bn), the source added. FCA said in its thirdquarter report that the tax authorities had issued to the company a final audit report in October this year "which, if confirmed in the final audit assessment, could result in a material proposed tax adjustment related to the October 12, 2014 merger of Fiat SpA into FCA NV".

It said the issuance of a final audit report starts a 60-day negotiation period, which ends with the issuance of a final audit assessment expected to be received by the end of December 2019.

"The company believes that its tax position with respect to the merger is fully supported by both the facts and applicable tax law," it said yesterday. Reuters

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