F1 under scrutiny from the Italian Guardia di Finanza

Formula 1 has come under the attention of the Italian Revenue Authorities due to alleged unpaid taxes related to Grands Prix held in Italy. The Guardia di Finanza has launched a formal investigation involving all current and recent Formula 1 drivers. The action was initiated following a request from the Italian Court of Auditors, which called for checks across the three provinces involved in hosting Grands Prix: Monza for the Italian Grand Prix, Imola for the Emilia-Romagna Grand Prix, and Mugello, which hosted the 2020 Tuscan Grand Prix.

Until now, neither drivers nor their teams had received any tax payment requests from Italian authorities, but the situation has changed with the start of these new investigations.

Authorities have already sent official letters to the drivers involved. The documents request the submission of tax returns for the 2025 fiscal year and ask drivers to make contact with the Italian tax office, either personally or through a legal representative, in order to define the next steps of the procedure. However, the stated objective is not limited to 2025 alone: where legally possible, the intention is also to recover unpaid taxes from previous years, potentially going back several financial cycles.

According to sources, the Italian tax authority aims to carry out extremely detailed checks on relevant income streams. In order to accurately reconstruct earnings, access to driver contracts and sponsorship agreements has reportedly been requested. This approach is intended to build a complete financial picture of income generated through activities carried out in Italy during race weekends.

Criminal consequences and financial penalties

For some drivers, the tightening of tax scrutiny could lead to significant consequences. If the amount of unpaid taxes exceeds 50,000 euros, Italian law classifies the violation as a criminal offence for individuals. In addition to the recovery of unpaid taxes, substantial financial penalties are also expected. The 50,000 euro threshold therefore becomes the critical point at which a tax irregularity escalates into a criminal matter.

The issue of taxation for non-resident athletes had already been raised in Italy in 2020, when it was discussed in parliament but did not lead to any concrete legislative outcome. Similar systems already exist in other Formula 1 host countries like Australia, the United Kingdom, and the United States, where non-resident athletes are taxed on income generated within the territory. The Italian initiative therefore fits into a well-established international framework, although its application is being described as unexpectedly strict.

Is Monza at risk?

At present, the Italian Grand Prix at Monza is not at risk of being removed from the Formula 1 calendar due to the ongoing dispute with the tax authorities. However, if the situation involving the drivers were to escalate further, Liberty Media could potentially take a more drastic decision and consider freezing Italy’s place on the calendar in favour of countries offering greater tax advantages or taking a more lenient approach to such issues.