While F1 has been on its month-long impromptu hiatus, the drama has not stopped. Formula 1 drivers, both current and former, are believed to be caught up in a widening clampdown by Italian tax authorities. The Italian authorities are reportedly seeking to collect unpaid taxes related to the Grand Prix, which was retroactively held on Italian soil.
Per the long-standing regulation, which tax officials are tightening enforcement of, foreign athletes (This does not impact Kimi Antonelli or Arvid Lindblad) must pay tax on income earned while competing in Italy and therefore should pay the appropriate taxes. The force surrounds whether drivers fully declare the income generated during race weekends in recent seasons.
Tax evasion is nothing new in F1, and most drivers live in Monaco because of its zero-tax policy, where the country does not charge personal income tax, allowing high earners to keep up to 50% more of their salary than in countries with high tax rates.
This rule applies regardless of their residence, but the rule itself is clear; enforcement has historically been inconsistent and has prompted Italian lawyer Alessandro Mei to commission a broad investigation into foreign athletes, including F1 drivers.
This is not just about race-related income but also about sponsorship and appearance fees associated with Italian events, and about whether taxes were correctly withheld and declared. With this in mind, authorities are reportedly seeking access to driver contracts and sponsorship agreements to calculate the precise earnings that should be taxed on.
It has been reported that all drivers have received a letter requesting submission of a 2025 tax return, with authorities seeking to recover unpaid taxes dating back multiple years.
Under Italian law, any unpaid tax exceeding €50,000 constitutes a criminal offence. The consequence is substantial fines, recovery of unpaid tax and additional administrative sanctions.
Since 2020, F1 has raced at three Italian circuits- Monza, Imola, and Mugello. When Monza is the only one currently on the F1 calendar, the Italian Court of Auditors made it mandatory to examine all three provinces.
It has been reported that only administrative inspections have been initiated so far, with no criminal investigation currently underway, and it remains unclear whether the investigation targets individual drivers, teams or both.
In Italy, foreign athletes are classed as “freelancers”, even when under contract with teams. Typically, this places responsibility on teams to withhold tax at source and pay it directly to Italian authorities on the driver’s behalf.
If that interpretation holds, liability may fall primarily on teams rather than drivers, with two notable exceptions: Ferrari and Racing Point, as both are based in Italy, which could further complicate their tax positions.
Speaking to Il Resto del Carlino, Alessandro Mei was unequivocal: “It is not up for debate that athletes who earn income in Italy, even if they do not live in Italy, must declare it in Italy and pay taxes here.”
He added: “I’m not doing this for personal gain, but out of a sense of responsibility, given the millions of dollars in tax evasion that could potentially be uncovered.”
Mei has also filed a similar report regarding Formula E races in Rome, suggesting that this crackdown extends beyond Formula E.
If teams or individuals are found guilty of tax evasion, they are unlikely to go to prison; instead, they will have to pay any unpaid tax for all outstanding amounts. Given that there have been multiple Italian GPs staged over the past six years, this could entail substantial financial exposure and repayment.
For now, the situation remains at the administrative review stage, but the scope of the inquiry and the sums involved mean escalation is possible.
While Monza is the only Italian race left on the F1 calendar, the financial legacy of Imola and Mugello may yet come back into sharp focus, leaving teams and drivers awaiting clarity on where responsibility ultimately lies.
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