Fiat Industrial, which owes its heritage to Italy but controls the New Holland tractor brand, confirmed plans to move its tax residency to the UK, a move which would allow to exploit a cut in corporate taxes.

The group, which manufactures Iveco trucks and is in the process of taking complete control of farm equipment group CNH Global, said that it had requested a "ruling" from "competent authorities" over moving its tax domicile to the UK from the Netherlands.

The move would be "fully consistent with the main objectives" of Fiat Industrial's decision to buy-out the minorities in CNH, namely the "establishment of a global player in the capital goods sector that is attractive to international investors

It also followed examination of the treaties signed between countries over where multinational companies pay their taxes.

"Having examined the various bilateral treaties against double taxation, the group believes that establishing its tax domicile in the UK would put [the combined company's] shareholders on the same level ground as those of its principal competitors," Fiat Industrial said.

Tax Cuts

The move would also allow the group to benefit from the succession of cuts to corporation tax that the UK has introduced in a means to prevent companies fleeing to lower tax regimes, and attract new investment.

Corporation tax rates have fallen from 30% six years ago to 23.25% today, with a further fall to 20% planned for 2015.

The UK has also relaxed rules on taxation of companies controlled abroad.

Fiat Industrial said that its businesses paid some E500m in taxes raised on local tax laws, 46% in North America, 11% in Latin America and 27% in Europe.

International Heritage

Fiat Industrial was demerged from Fiat, the Italian car giant, in 2011 taking on interests in Iveco and the 89.3% stake in CNH Global.

CNH Global owns the Case and New Holland farm equipment brands – the latter named after New Holland, Pennsylvania, where the marque was launched in the late 19th century.

Fiat Industrial shares, listed in Milan, closed up 1.2% at E9.25.