The non-Italian teams are facing trouble with the tax authorities in Italy: hundreds of millions of euros in untaxed income are at stake
While Formula 1 is celebrating record revenues worldwide, a legal storm is brewing in Italy. As the daily newspaper Il Resto del Carlino reports, the Bolognese financial police (“Guardia di Finanza”) are scrutinizing the tax practices of teams based abroad. The Grand Prix in Monza, Imola and Mugello are at stake – and a lot of money
The core of the conflict lies in the tax treatment of drivers’ salaries. In Italy, professional athletes are legally considered self-employed. If they compete in a race on Italian soil, they generate taxable income there – regardless of where they have their official residence.
Normally, the racing team acts as a so-called “Sostituto d’imposta”, i.e. a tax substitute. This means that the team is legally obliged to deduct the withholding tax directly from the driver’s fee and pay it to the Italian tax authorities.
According to the investigators, numerous foreign teams, including heavyweights such as Mercedes and Red Bull, are said to have failed to comply with this obligation when racing on Italian soil.
Hundreds of millions of euros at stake
The investigation was triggered by a complaint from Bologna lawyer Alessandro Mei and research by tax expert Emilio De Santis. “It’s undisputed: athletes who earn income in Italy must also declare and pay tax on it here,” says Mei. Due to the pilots’ enormous salaries, there is talk of tax evasion amounting to hundreds of millions of euros.
The investigation is still in an administrative phase, but if the allegations are substantiated, the teams could face massive back payments and severe penalties. Formula E is also said to have already been targeted by the authorities, where races were held in Rome and Misano.
The discussion is not entirely new. As early as 2020, there was a parliamentary question in the Italian Senate calling for a more efficient model for collecting taxes from foreign athletes. The fact that the authorities are now getting so serious in April 2026 shows that the political pressure on the sport is growing.
While Ferrari, as an Italian team based in Maranello, should not be affected by these specific audits as they are already liable for tax in Italy, things could get uncomfortable for the other racing teams. If Italy enforces its hard line, this could send a signal to other EU countries.
