Italian metal company probed for '120-mn-euro tax evasion'

Accused of buying primary materials at inflated prices

Italian metal company probed for '120-mn-euro tax evasion'

Rome, June 10 - A leading Italian company in the lead- and zinc-working sectors is being probed for allegedly evading more than 120 million euros in taxes, investigators said on Monday. Finance police in the province of Rome believe that the metal company, which belongs to a Swiss holding company, padded tax deductions over a period of years by inflating the cost of primary materials bought from within the group, thus shifting taxable revenues toward territories with a lower tax burden. The Italian subsidiary aroused the suspicions of finance police in Rome because it has never declared a profit - only substantial losses - despite its importance on an international level and profits reported by its Swiss parent. An analysis of the company's commercial transactions with its Swiss parent revealed that the Italian company allegedly acquired primary materials from across the border - but within the same corporate group - at prices well above market rate. Investigators found the company's reported results were inconsistent with the company's real functions within the group and risks assumed in Italy. The Italian company in question has manufacturing facilities in a depressed mining and metal-production zone in southwest Sardinia called the Sulcis-Inglesiente basin.

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