A major financial investigation has been launched into several Formula One teams and drivers, with Italian authorities examining what could amount to hundreds of millions of euros in alleged unpaid taxes.
The probe is being led by the Guardia di Finanza in Bologna, which is focusing on income generated during races held at iconic venues such as Autodromo Nazionale Monza, Autodromo Enzo e Dino Ferrari, and Mugello Circuit. Investigators suspect that foreign teams competing in these events may have failed to correctly apply Italian tax rules, particularly those related to withholding taxes on earnings tied to races within the country.
Under Italian legislation, Formula 1 drivers are treated as self-employed individuals. However, the responsibility for deducting and paying taxes on their Italy-based income falls on the teams, which act as withholding agents. This system requires teams to apply a “ritenuta alla fonte,” effectively taxing a portion of drivers’ salaries and sponsorship earnings connected to Italian Grands Prix.
Authorities believe that this obligation may not have been consistently fulfilled in recent years. While enforcement of the rule has historically been uneven, officials are now pushing for strict compliance, including retroactive assessments covering the period between 2020 and 2024. If proven, the financial implications could be enormous, with estimates suggesting that the unpaid sums could reach into the hundreds of millions.
The investigation gained significant momentum after a formal complaint was filed by Bologna-based lawyer Alessandro Mei. His submission was supported by earlier research conducted by tax specialist Emilio De Santis, whose findings in 2020 had already drawn attention at a parliamentary level. Mei has argued that the legal framework is clear: any athlete earning money in Italy is required to declare and pay taxes there, regardless of their country of residence.
In pursuing the case, Mei has emphasized that his actions are motivated by legal responsibility rather than personal benefit, pointing to the scale of the alleged discrepancies. He has also collaborated with regional authorities in Lombardy, Emilia-Romagna, and Tuscany to strengthen enforcement efforts around the circuits involved.
Legal experts warn that the consequences could extend beyond financial penalties. According to analysis from eucrim, which works alongside the Max Planck Institute for the Study of Crime, Security and Law and the European Commission, evading more than €50,000 in taxes under Italian law can trigger criminal proceedings.
Potential sanctions could include substantial fines and, in serious cases, prison sentences ranging from six months to five years under decree 74/2000. While incarceration is not currently seen as the most likely outcome, authorities are determined to recover any unpaid taxes and ensure future compliance.
As the investigation unfolds, it casts a spotlight on the financial practices within Formula 1, highlighting how complex international earnings structures can come under scrutiny. The outcome could have significant ramifications not only for those directly involved but also for how taxation is enforced across global sporting events.