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Allegations followed tax changes introduced in 2021, 2023

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Authorities had sought 1.3 bln euros, have dropped most

fines

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ION has invested 6.5 bln euros in Italy in recent years

By Valentina Za

MILAN, June 8 (Reuters) - Fintech group ION will pay 280

million euros ($319 million) to settle a dispute with Italian

tax authorities that had sought 1.26 billion euros from the

company, founder Andrea Pignataro told Reuters on Sunday.

Italian authorities had been looking into alleged tax

evasion at the financial data and software provider for the

2013-2023 period.

It was not possible to reach the authorities on Sunday

outside business hours.

Reuters first reported in April that they had asked ION for

up to 500 million euros in missing revenues, a sum that more

than doubled with interest payments.

Dublin-based ION, which has offices across the globe and is

controlled by Luxembourg-based holding company Bessel, has

invested around 6.5 billion euros in recent years in assets in

Italy's financial services industry.

Documents reviewed by Reuters showed Italy's tax authorities

had decided to drop most of the proposed penalties given

Pignataro's cooperative attitude and because of uncertainties,

including in the legal criteria to establish his place of

residency.

The allegations followed changes Italy introduced in 2021

and 2023 to tax rules for foreign-controlled companies.

The changes in 2021 allowed certain corporate earnings to be

taxed as personal income. Then, under another reform in 2023,

the decisive element for a person's tax domicile became the

place of residency and their family and personal relations.

Pignataro spends most of the year outside of Italy, but his

wife resides in his native country. With a net worth of $35.8

billion, according to Forbes, Pignataro is one of Italy's

wealthiest people.

More than 90% of the sum paid in the out-of-court settlement

relates to a corporate reorganisation ION underwent in 2022,

leading to the revaluation of some assets.

Authorities eventually decided to apply the ordinary 24%

corporate tax rate to the 2022 transaction, the documents

showed. That broadly matches the lowest tax rate for personal

income, with the highest rate reaching 43%.

Pignataro said the intricacies of Italy's tax rules and

frequent changes stoked uncertainty, hampering investments.

"The real cost isn't what I paid. The real cost is in

investments that never arrive, startups that move abroad, and

professionals who lose faith in the system," he said.

Il Resto del Carlino newspaper first reported news of the

settlement.

($1 = 0.8777 euros)

(Additional reporting by Emilio Parodi; editing by Barbara

Lewis)