Campari Tax Evasion Case: €1.3 Billion Shares Seized from Lagfin in Italian Probe

Introduction

In a stunning development in the world of international finance and spirits giants, Italian authorities have seized €1.3 billion ($1.5 billion) worth of Campari Group shares from Luxembourg-based holding company Lagfin. This action stems from an ongoing Campari tax evasion probe centered on alleged failures to pay taxes during a corporate merger. The case highlights the scrutiny faced by multinational corporations under Italy’s strict exit tax rules, which target undeclared capital gains when companies relocate assets abroad.

Campari, the iconic producer of aperitifs like Campari, Aperol, Grand Marnier, and Courvoisier, remains uninvolved, but its controlling shareholder Lagfin—and chairman Luca Garavoglia—face intense investigation. This Lagfin shares seizure underscores the risks of cross-border tax planning in the European Union. As businesses navigate complex mergers and headquarters shifts, this incident serves as a pedagogical example of how tax authorities enforce compliance.

Analysis

The Campari tax evasion case originated from a Milan prosecutors’ investigation launched last year into Lagfin’s 2018-2020 activities. Financial police uncovered €5.3 billion in undeclared capital gains, on which no Italian exit tax was paid. Italy’s exit tax, introduced under EU directives and national law (Article 24 of Legislative Decree 147/2015), imposes a levy on unrealized gains when a company transfers its tax residence abroad or shifts assets to foreign entities.

Merger Mechanics and Tax Allegations

Lagfin, which holds over 50% of Campari shares and 80% voting rights, absorbed its Italian subsidiary in a restructuring move. Prosecutors allege this merger evaded €1.3 billion in taxes equivalent to the seized shares’ value. Reports from Il Sole 24 Ore suggest the restructuring shifted Italian assets into foreign ownership primarily for tax benefits, potentially violating anti-abuse rules under Italy’s General Anti-Avoidance Rule (GAAR).

Key Players Involved

Luca Garavoglia, the billionaire heir to the Campari fortune via his late mother, and Giovanni Berto, head of Campari’s Italian operations, are among those under scrutiny. Lagfin maintains it has always complied with Italian tax regulations and describes the matter as a “tax dispute” it will contest vigorously.

Impact on Campari Group

Despite the seizure, Lagfin emphasizes that Campari’s operations and its controlling position remain unaffected due to the voting rights structure. Valued at approximately €7 billion on the Milan Stock Exchange, Campari continues production uninterrupted.

Summary

Italian financial police seized €1.3 billion in Campari Group shares from Lagfin amid a tax evasion investigation probing unpaid exit taxes on €5.3 billion in capital gains from 2018-2020. The probe focuses on a merger that allegedly dodged equivalent taxes by moving assets abroad. Campari Group and its subsidiaries are not implicated, but Lagfin’s leadership, including chairman Luca Garavoglia, faces charges. Lagfin denies wrongdoing and vows to defend itself.

Key Points

Practical Advice

For multinational firms eyeing mergers or relocations, this Campari tax evasion case offers actionable lessons in tax compliance. First, conduct thorough due diligence on exit tax implications under host country laws. Engage tax advisors familiar with EU Anti-Tax Avoidance Directives (ATAD) to model scenarios.

Steps for Compliant Restructuring

1. Pre-Transaction Ruling: Seek advance tax rulings from Italian Revenue Agency (Agenzia delle Entrate) to confirm neutrality.
2. Documentation: Maintain robust records proving non-tax motives for asset shifts, countering GAAR challenges.
3. Exit Tax Payments: Calculate and provision for taxes on unrealized gains; options include deferral with guarantees.
4. Post-Merger Audits: Schedule internal reviews to align with transfer pricing rules.

Businesses in the beverages sector, like spirits producers, should benchmark against Campari’s model: separate operational entities from holding structures to shield core activities.

Points of Caution

While legitimate tax planning is legal, this case warns against structures perceived as abusive. Italian authorities, empowered by 2023 budget law enhancements, aggressively pursue tax evasion schemes involving low-tax jurisdictions like Luxembourg. Caution is advised on:

• Timing mergers near tax changes.
• Relying solely on foreign advice without Italian counsel.
• Undervaluing capital gains in valuations.

Non-compliance risks asset freezes, fines up to 200% of evaded tax, and criminal penalties including imprisonment for executives.

Comparison

The Lagfin Campari seizure mirrors other high-profile Italian tax probes. For instance, in the 2022 LuxLeaks aftermath, Fiat Chrysler faced €20 million in back taxes for Luxembourg financing deals ruled abusive by the EU General Court. Similarly, the 2019 probe into Apple’s Irish structures (though settled) highlighted exit tax parallels.

Versus Other Spirits Industry Cases

Diageo encountered UK diverted profits tax in 2017 over IP transfers, paying £100 million. Unlike Campari, where shares were seized outright, these often resolve via settlements. Italy’s approach is notably aggressive, with Guardia di Finanza seizures exceeding €10 billion annually in tax fraud cases.

Legal Implications

Applicable Italian laws include:

• Exit Tax Regime: Legislative Decree 147/2015, taxing gains at 24% corporate rate, deferrable over 5 years with collateral.
• Merger Abuse: Article 10-bis Draft Law 212/2000 (GAAR) voids transactions lacking business purpose.
• Criminal Tax Evasion: Article 4 D.Lgs. 74/2000; penalties for undeclared income over €50,000 include 1.5-6 years imprisonment.

Lagfin’s defense may invoke EU freedom of establishment (TFEU Article 49), arguing discriminatory treatment. Precedents like Commission v Italy (C-40/18) affirm exit taxes but require proportionality. The case could reach the European Court of Justice, influencing cross-border restructurings.

Conclusion

The €1.3 billion Campari shares seizure from Lagfin exemplifies Italy’s crackdown on alleged tax evasion in mergers. Rooted in verifiable undeclared gains and exit tax shortfalls, it educates on the perils of aggressive planning. As Lagfin fights back, the outcome will shape corporate strategies in the EU. For spirits icons like Campari—born from a 1860 Milan bar bitter turned global empire—reputation and compliance are paramount. Businesses worldwide should heed this: transparency trumps evasion.

FAQ

Sources

• Life Pulse Daily: “Police snatch €1.3bn from Campari proprietor over alleged tax evasion” (Published 2025-11-10).
• BBC Statement from Lagfin.
• Il Sole 24 Ore reports on asset shifts.
• Italian Financial Police (Guardia di Finanza) announcement.
• Campari Group official disclosures; Milan Stock Exchange data.
• Italian Tax Code: Legislative Decree 147/2015 (Exit Tax); D.Lgs. 74/2000 (Criminal Evasion).
• EU Case Law: C-40/18 Commission v Italy.