Hong Kong-based CK Hutchison Holdings’ (HK:0001) Italian telecommunications unit, Wind Tre, reportedly faces tax scrutiny on a major asset sale to Spain’s Cellnex Telecom (ES:CLNX). According to Bloomberg, Wind Tre did not pay registration taxes during the sale of mobile phone towers to Cellnex in a €3.4 billion deal. CK Hutchison shares fell by 0.86% as of writing.
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Wind Tre operates under CK Hutchison Holdings Limited and offers mobile and fixed-line telephony services.
Italy Investigates CK Hutchison Unit
A Bloomberg-reviewed document reveals that the alleged tax evasion amounts to around €132 million for 2022, due to an unjustified reduction in the tax burden. Additionally, it indicates that Wind Tre executives employed a complex asset-sale arrangement through CK Hutchison Europe Investments Sarl, a Luxembourg-based entity, to reduce the company’s tax liabilities in Italy. This prompted an investigation that began in 2023.
On the other hand, Wind Tre stated its cooperation with tax authorities in the ongoing investigation and stated that the transaction fully complies with applicable tax laws. Meanwhile, CK Hutchison and Cellnex have not made any official comment on the news.
Italy Tightens Grip on Tax Scrutiny
Over the years, Italy has increased its scrutiny of global companies’ tax practices. Earlier this month, Italy concluded an investigation into alleged tax evasion amounting to €887.6 million by Meta (META), the parent company of Facebook, WhatsApp, and others.
Similarly, U.S.-based streaming media company Netflix (NFLX) has reportedly settled a tax dispute with Italy and agreed to pay €55.8 million.
Year-to-date, CK Hutchison shares have gained over 3% in trading.
