Fiat/Chrysler CEO Sergio Marchionne continues to signal a move to the US is likely.

Fiat took another step towards loosening its ties to Italy as Fiat Industrial’s board of directors met this week and approved a merger of its principal Dutch and Italian subsidiaries.

The move comes as rumors and speculation continue to mount that Fiat S,p.A. will ultimately shift its headquarters from Turin to the Detroit suburbs once the maker finalizes its acquisition of Chrysler. The fear of losing the company has led Italian government leaders to look for ways to keep Fiat from picking up and moving.

The Fiat Industrial Board of Directors approved the cross-border merger of the wholly-owned subsidiary Fiat Netherlands Holding N.V. with Fiat Industrial S.p.A, the company said in a brief statement. The merged company is expected to reside neither in the Netherlands or Italy but in England where Fiat officials have said the company will be domiciled for tax purposes.

The move has already stirred outrage in Italy since Fiat is widely regarded as Italy’s premier industrial company and is a leading employer and taxpayer.

The betting is Fiat Industrial’s move to London will serve as a prelude to Fiat shifting the corporate headquarters of its automotive business to Detroit where it now partners with the Chrysler Group. However, officials from Fiat automotive issued a statement saying last week that such a move “was not on the agenda.”

However, Fiat and Chrysler CEO Sergio Marchionne — who now has homes both in Italy and in the U.S. not far from Chrysler headquarters in Auburn Hills, Michigan — is aggressively moving forward with plans to merge the two companies into one legal entity.

Fiat Industrial was separated from the automotive business as part of Marchionne’s ongoing restructuring of the Italian industrial giant. Over the years, the trucking, agricultural and construction business units that are now part of Fiat Industrial had been instrumental in helping keep Fiat’s automotive business alive.

Meanwhile, Fiat officials, while confirming Fiat Industrial will set up a domicile in London have labeled as “absolutely false” reports that the cash-strapped Italian government would lose 500 million euros in tax revenues if it moves its tax base to Britain after it completes a merger with its U.S.-based subsidiary CNH Global NV.

Fiat Industrial said in a statement that it believed that making Britain its fiscal base would put its shareholders on the same footing as those of major capital goods competitors. It said it was awaiting a response from authorities in Britain and the Netherlands, where the new company will be legally based, before finalizing the move.

The prospect that Fiat Industrial would move its tax base has raised concern among Italian lawmakers and unions. Fiat Industrial SpA, which is based in Turin and was spun off from Fiat in 2011, denied that placing the new company’s tax home in Britain would cause `’considerable damage to the tax office of our country.”

It said that the that 500 million euros refers to the total tax burden on all its units, including the 46% that are based in North America and 11% in Latin America. It said of the 27% in Europe, only 5% are based in Italy.

The new company will be legally based in the Netherlands and traded on the New York Stock Exchange. Significantly, Marchionne recently expressed his clear desire to have parent Fiat S.p.A.’s listing move from the Turin stock market to the NYSE.

Fiat Industrial said in the statement that it chose the Netherlands in keeping with its goal of `’creating a capital goods company able to attract international investors.”