The Bitter Aftertaste: How Italy Presented Campari with a €1.3-Billion Bar Tab
On the evening of October 31, 2025, just after the Milan stock exchange closed for the day, officers from Italy’s Guardia di Finanza—the financial police—executed a seizure order that would send tremors through the world of international tax planning. They froze shares of Davide Campari Milano worth more than 1.29 billion euros. The shares belonged to Lagfin SCA, a Luxembourg-based holding company controlled by the Garavoglia family, which has owned the Campari empire for generations. The seizure came on orders from prosecutors in Monza, a city northeast of Milan, under the supervision of chief prosecutor Claudio Gittardi. The charge: “fraudulent declaration through other means”—dichiarazione fraudolenta tramite altri artifici, in the formal Italian—centered on allegations that Lagfin had failed to pay exit tax on a 2019 corporate transaction.
The financial scale of the case is staggering. Investigators determined that the 2019 merger had generated unrealized capital gains exceeding 5.3 billion euros, none of which had been declared for exit-tax purposes. The estimated unpaid tax bill comes to roughly 1.29 billion euros, making this one of the largest alleged tax-evasion cases in Italian judicial history. But the matter extends beyond mere fiscal dimensions. It represents a test of Europe’s legal framework for taxing capital mobility and of the practical effectiveness of the anti-abuse mechanisms established under the ATAD directive—the European Union’s attempt to prevent corporations from using legal structures to avoid paying their fair share.
This article offers a comprehensive legal analysis of the Lagfin-Campari case in the context of how exit-tax provisions have evolved in European and Italian law, with particular attention to the evidentiary and qualification problems inherent in cross-border corporate structures.
The Architecture of Exit Taxes
An exit tax is a particular species of levy—one imposed on unrealized capital gains at the moment when assets or entities leave a country’s tax jurisdiction. The concept rests on a simple premise: the country where an asset appreciated in value has a legitimate claim to tax that appreciation, even if the gain hasn’t yet been converted to cash through an actual sale. Without such a mechanism, countries would face a permanent loss of taxing rights. Once assets moved to another jurisdiction, any subsequent sale would be taxable in the destination country, not in the country where the value actually accrued.
In the context of corporate restructurings, exit taxes are designed to prevent taxpayers from exploiting the mobility of legal structures to engage in what amounts to tax arbitrage. The classic scenario involves a company that owns assets whose market value significantly exceeds their book value. The company reorganizes by transferring those assets to an entity located in a jurisdiction with a more favorable tax regime, then realizes the capital gains in that new jurisdiction. An exit tax essentially freezes the tax moment, forcing a settlement with the country of original residence before the transfer occurs.
The mechanism was codified at the European Union level in Council Directive (EU) 2016/1164 of July 12, 2016, which established rules to counter tax-avoidance practices that directly affect the functioning of the internal market—the so-called ATAD directive (Anti-Tax Avoidance Directive). Article 5 of that directive requires member states to implement exit-tax rules when taxpayers transfer assets from one member state’s jurisdiction to another, move their tax residence, or transfer business operations through a foreign establishment. The directive does, however, provide significant procedural safeguards, particularly the option to pay the tax in installments and the suspension of payment obligations for intra-E.U. transfers, provided the assets don’t ultimately leave the Union altogether.
Italian tax law had implemented exit-tax mechanisms even before the ATAD directive was adopted, though the scope of application and specific procedural solutions have been the subject of successive amendments designed to bring domestic law into compliance with E.U. requirements and with rulings from the European Court of Justice. In the Italian legal system, exit taxes apply to both individuals and corporate entities, though for the latter, the taxation of so-called plusvalenze—capital gains arising from the disposal of shares or assets—is particularly significant.
A Family Business and Its Structure
To fully understand the charges against Lagfin, one must trace the corporate architecture of the Campari group and the sequence of events that led to the October, 2025, asset seizure. The Campari story begins in 1860, when Gaspare Campari, a bartender in Milan, invented a bitter liqueur that became a favorite of his customers. The drink—ruby red, bracingly bitter, impossibly complex—was unlike anything else available at the time. By 1904, the Campari family had begun manufacturing it commercially, and by the mid-twentieth century it had become one of Italy’s most recognizable exports. Today, Campari Group is one of the world’s largest producers of premium spirits. Its portfolio includes such well-known brands as Aperol, Grand Marnier, Courvoisier, Wild Turkey, and Espolòn. The company is valued at roughly seven billion euros on the Milan stock exchange.
The ownership structure of the group is built around Lagfin SCA, a Luxembourg-based holding company established in 1995 and controlled by the Garavoglia family. Luca Garavoglia, who inherited control of the business following his mother’s death, serves as chairman of Campari Group. Lagfin owns more than fifty per cent of Davide Campari Milano’s shares and commands eighty per cent of voting rights, making it the dominant controlling shareholder. This concentration of corporate control is significant for assessing the nature of the restructuring that took place.
In 2019, a transaction occurred that is central to the current case: an extraordinary merger by incorporation, in which Lagfin’s Italian branch absorbed a company called Alicros. Alicros had been the Garavoglia family‘s previous holding structure and served as the principal shareholder of Davide Campari Milano. The transaction was characterized as an intra-group reorganization aimed—according to official communications—at optimizing the corporate structure and simplifying the ownership chain. From a commercial-law perspective, the operation was a standard merger by acquisition, in which the acquiring entity (Lagfin’s Italian branch) obtained, through universal succession, all the assets and liabilities of the acquired entity (Alicros), which consequently ceased to exist as a separate legal entity.
Investigators determined, however, that in connection with this merger, Lagfin’s Italian branch failed to declare capital gains subject to exit tax exceeding 5.3 billion euros. Those gains derived from the difference between the market value of the acquired assets—particularly the controlling stake in Campari—and their book value. The crucial finding, according to prosecutor Michele Trianni, who is coordinating the investigation, is that the corporate group, through a series of complex transactions, effected only a formal transfer of assets held by the Italian-based company to a newly created domestic branch, while actual management of the financial portfolio was exercised at the level of the foreign parent company.
This last point has fundamental significance for the legal characterization of the conduct. Under Italian tax rules, exit taxes apply not only when assets are physically transferred outside Italy but also when tax residence is moved or when assets cease to be effectively connected to the Italian tax base. If investigators can prove that the real decisions regarding asset management were made in Luxembourg, and that the Italian branch served merely as a façade, then one can argue that an actual economic transfer subject to exit tax occurred, regardless of the formal maintenance of a branch in Italy.
The Charge: Fraudulent Declaration
Lagfin and its legal representatives have been made subject to criminal tax proceedings based on the charge of “fraudulent declaration through other means”—one of the most serious tax offenses under Italian law. This charge differs significantly from simple failure to report income or erroneous application of tax rules. It requires showing that the taxpayer deliberately used artificial means, fictitious transactions, or other manipulations to conceal the true character of a business operation and thereby avoid taxation.
The construction of this offense assumes three cumulative elements. First, a tax return must be filed that is objectively false, in the sense that it fails to reflect the actual facts or legal circumstances relevant to determining the amount of tax owed. Second, that falsity must result from the use of “other means” of deception—a concept that encompasses any actions designed to hide or distort economic reality and that go beyond mere omission of information or erroneous interpretation of rules. Third, there must be intent on the subjective side: awareness of the falsity of the declaration and a desire to obtain a tax benefit in a manner contrary to law.
In the context of the Lagfin case, the prosecution must show that the 2019 transaction structure was designed in a way that deliberately avoided triggering an exit-tax obligation, even though a transfer of economic value out of Italian tax jurisdiction had substantively occurred. The key evidentiary element will be an analysis of the actual distribution of management and control functions within the capital group. If prosecutors can prove that, despite the formal existence of Lagfin’s Italian branch, the real decisions regarding investment strategy, disposition of assets, and exercise of corporate rights associated with the Campari shareholding were made by the organs of the Luxembourg company, then one can argue that the Italian branch served only an instrumental function, while real economic control was exercised from Luxembourg.
This kind of argument finds support in a concept developed in Italian case law known as sostanza economica—economic substance. According to this doctrine, tax law cannot be applied in isolation from the actual economic character of an operation, and mere compliance with the formal requirements of commercial law does not preclude characterization of a transaction as abusive if its primary or sole purpose was to obtain a tax benefit. In practice, this means that courts can “pierce” the legal form of a corporate construction and assess it through the lens of actual flows of economic value and the distribution of risks and business functions.
An additional element of the case is that Lagfin SCA itself has been made subject to proceedings as a collective entity under Italian provisions on the administrative liability of legal persons for crimes (Legislative Decree of June 8, 2001, No. 231). This system, introduced in response to international anti-corruption conventions, provides for the possibility of holding legal entities liable for crimes committed by their organs or representatives, if the entity benefitted from those crimes and failed to implement adequate organizational and control models designed to prevent such violations. This liability is quasi-criminal in nature and can result in administrative sanctions of a pecuniary character, as well as so-called interdictory sanctions, such as prohibitions on conducting business or exclusion from public-procurement proceedings.
Freezing the Assets
The seizure of Campari shares valued at €1,291,758,703.34 was carried out pursuant to an order from the investigating judge (Giudice per le Indagini Preliminari) in Monza under the procedure for preventive seizure (sequestro preventivo). This institution, regulated in the Italian Code of Criminal Procedure, permits the securing of property belonging to suspects or third parties even at the preliminary-investigation stage, before an indictment has been filed, if there is reasonable suspicion that a crime has been committed and a real risk that the object connected to the crime, or constituting its proceeds, might be hidden, destroyed, or dissipated.
In cases involving tax crimes, preventive seizure finds particular application as security for future enforcement of public-law claims. Italian law provides for the possibility of ordering forfeiture of assets equivalent in value to benefits obtained from a crime (confisca per equivalente), which means that even if the specific assets directly connected to the crime are no longer available, the court can order seizure of other assets of equivalent value. In Lagfin’s case, the seizure was imposed on Campari shares, which are liquid and easily valued, constituting the principal asset of the Luxembourg company.
From a procedural perspective, it’s important to note that preventive seizure does not determine guilt—it is a temporary measure that can be lifted at any point in the proceedings if the grounds for its application cease to exist or if the accused provides appropriate security. In practice, however, given the scale of the amount subject to seizure (nearly 1.3 billion euros), the possibility of Lagfin providing alternative security seems limited, as it would require essentially pledging the company’s entire assets.
In its press statement of November 1, 2025, Lagfin emphasized that the seizure does not affect its position as the controlling shareholder of Campari Group, since despite the freeze on the shares it still holds eighty per cent of voting rights. This statement is true from a formal standpoint—seizure does not deprive the owner of voting rights arising from the seized shares; it merely prevents their sale or encumbrance. In practice, however, this situation creates serious operational risk for the capital group, because if the case is resolved unfavorably for Lagfin, those shares could be subject to forfeiture to the State Treasury, which would mean the Garavoglia family‘s actual loss of control over Campari.
The proceedings are being conducted by the Prosecutor’s Office in Monza, which requires some explanation from the perspective of territorial jurisdiction. The case was originally investigated by the prosecutor’s office in Milan, where Campari’s operational headquarters are located and where the Guardia di Finanza conducted its tax audit in 2023-24. For reasons not disclosed in press sources, the investigation was transferred to Monza, a city located northeast of Milan. Such transfers of competence between prosecutors’ offices can result from procedural causes, such as conflicts of jurisdiction, overlapping cases being conducted by different units, or the particular specialization of a given prosecutor’s office in specific categories of economic crimes.
The Defense Strategy
In an official statement released to the media on November 1, 2025, Lagfin SCA categorically denied the charges, stating that it had “always acted in the strictest compliance with all applicable laws and regulations, including Italian tax laws.” The company characterized the matter as a “tax dispute that arose nearly two years ago and has never involved Campari Group in any way.” What’s more, Lagfin announced that it would “vigorously defend itself” in the case.
This rhetoric reveals the fundamental line of defense, which focuses on two elements. First, Lagfin signals that its interpretation of exit-tax provisions was justified and consistent with the letter of the law, indicating a strategy of contesting the very interpretation of tax norms applied by the tax authorities and the prosecutor’s office. Second, the emphasis that the case does not concern Campari Group is designed to isolate the group’s operational activities from the legal problems of the holding company—significant from the perspective of protecting market value and the business reputation of the concern.
From a legal perspective, the key question will be whether the defense contests the legal construction of exit tax as applied to this type of transaction, or argues that in fact no economic transfer subject to taxation occurred. The first strategy would require showing that Italian exit-tax provisions—in the interpretation adopted by the prosecution—are inconsistent with E.U. law, particularly with the freedom of establishment and free movement of capital guaranteed by the Treaty on the Functioning of the European Union. The case law of the Court of Justice of the European Union consistently indicates that national provisions establishing exit taxes must be proportionate to the fiscal objective being pursued and cannot constitute an unjustified obstacle to capital mobility. Italy’s implementation of the ATAD directive would need to be examined against these requirements.
The second defense strategy would focus on the facts, arguing that the structure of the 2019 transaction did not meet the conditions for application of exit tax, because no real transfer of assets outside the Italian tax base occurred. Lagfin could point to the existence of the Italian branch, its maintenance of full accounting records, compliance with reporting requirements, and the actual performance of certain business functions on Italian territory. The success of this line of defense would depend on the ability to show that the Italian branch was not an empty formal construction but possessed real economic substance in the form of appropriate personnel, premises, technological infrastructure, and genuine decision-making regarding business operations.
Nevertheless, documents cited by Reuters reveal that the investigation also concerns charges of filing false tax declarations, which goes beyond a simple interpretive dispute. If the prosecution has evidence that Lagfin’s representatives knowingly understated the value of assets subject to taxation, presented false information about the character of the transaction, or deliberately concealed material circumstances affecting the creation of a tax obligation, then the case ceases to be a matter of differences in legal interpretation and becomes a case of tax fraud, where the element of intent is crucial for criminal liability.
Implications for International Tax Planning
The Lagfin-Campari case has far-reaching consequences that extend beyond the individual case of an Italian spirits conglomerate. It sends a signal to all international capital groups using holding structures in Luxembourg, the Netherlands, Ireland, or other jurisdictions with favorable tax regimes that member-state tax authorities are increasingly aggressively enforcing anti-abuse provisions and do not accept formal constructions lacking economic substance.
The financial scale of the case—a seizure of more than 1.2 billion euros—demonstrates the determination of Italian fiscal authorities to pursue tax claims, even if it requires confrontation with powerful capital groups and challenging transactions conducted years earlier. This is consistent with a broader trend observed throughout Europe, where, in the wake of OECD initiatives regarding BEPS (Base Erosion and Profit Shifting) and implementation of the ATAD directive, member states have received stronger legal tools to combat aggressive optimization structures.
From the perspective of tax advisory, this case confirms the necessity of conducting thorough analysis of the economic substance of every cross-border transaction, particularly when it involves the transfer of valuable assets or reorganization of ownership structure. Mere compliance with the formal requirements of commercial and registration law is not sufficient—it is necessary to show that the intermediary entity in the structure (such as a Luxembourg holding company) performs real business functions, bears significant economic risk, and possesses adequate human and technological resources to realize declared business objectives.
In the Polish context, the Lagfin case should serve as a warning for capital groups using holding structures in other E.U. states to control Polish operating companies. Polish tax authorities, already equipped with provisions on a general anti-avoidance clause (Article 119a of the Tax Ordinance) and detailed regulations concerning beneficial owners in the context of dividends and interest, have the ability to challenge transactions lacking business justification. Additionally, in the context of exit tax, any transfer of valuable assets from Poland to foreign related entities should be preceded by careful analysis of tax consequences, including the potential obligation to recognize unrealized capital gains.
What Comes Next
The proceedings being conducted by the Prosecutor’s Office in Monza against Lagfin SCA are still at a relatively early stage. The seizure of Campari shares is precautionary in nature and does not predetermine the ultimate resolution of the case. In coming months, one should expect an intense legal battle in which the parties will present detailed expert analyses regarding the character of the 2019 transaction, the actual distribution of business functions in the capital group, and interpretation of Italian exit-tax provisions in light of E.U. law.
From a procedural perspective, the crucial question will be whether the prosecution can gather convincing evidence of intentional action by Lagfin’s representatives aimed at concealing the tax obligation. In economic cases of this scale, proof of fraudulent intent is often the most difficult element, as it requires showing not only the objective irregularity of the legal construction but also the accused’s subjective awareness of the unlawful character of their actions. The defense will certainly argue that the transaction was based on a justified interpretation of the rules, supported by opinions from professional tax advisers, which could exclude intent in the form of direct purpose.
One also cannot rule out the possibility that the case will end with a negotiated resolution. Italian tax law provides for the possibility of concluding so-called accordi con l’Agenzia delle Entrate—agreements with tax authorities that allow resolution of tax disputes through negotiation of the amount of the obligation and conditions for its payment. In Lagfin’s case, given the scale of the amount and the risk of losing control over Campari, the possibility of a negotiated settlement of the matter through payment of a specified portion of the claimed liability and abandonment of criminal prosecution could be an attractive option for both sides.
From the standpoint of the broader legal context, the Lagfin-Campari case represents a test for the European anti-abuse mechanisms introduced by the ATAD directive. If Italian courts confirm the prosecution’s position and find that the 2019 transaction constituted circumvention of exit-tax provisions, it will signal that member states are ready and able to effectively enforce these provisions even against the largest corporations. On the other hand, if the defense successfully undermines the charges by showing that Italian provisions are inconsistent with E.U. law or by demonstrating the actual economic substance of the transaction, it could weaken the ability of tax authorities to challenge similar structures in the future.
Regardless of the ultimate resolution, this case already constitutes an important case study for practitioners of tax and corporate law, showing how thin the line is between legal tax optimization and structures deemed abusive. In an era of intensified international coöperation among tax authorities, automatic exchange of tax information, and growing social pressure for fair taxation of international corporations, the space for aggressive tax strategies is systematically narrowing. The Lagfin-Campari case may mark the beginning of a new wave of exit-tax enforcement that will force international capital groups to revise their holding structures and embrace greater transparency regarding the actual distribution of business functions and strategic decision-making.
Author: Robert Nogacki, legal advisor at Skarbiec Law Firm, offering tax, legal, and strategic consulting services for companies