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.
