– While Formula 1 celebrates record revenues worldwide, a legal storm is brewing in Italy. As the daily newspaper Il Resto del Carlino reports, the Bologna financial police (“Guardia di Finanza”) are scrutinizing the tax practices of foreign-based teams. It’s about the Grand Prix in Monza, Imola and Mugello – and a lot of money.
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The core of the conflict lies in the tax treatment of driver 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 their official residence is.
Normally, the racing team acts as a so-called “Sostituto d’imposta”, i.e., as a tax substitute. This means: The team is legally obliged to withhold the withholding tax directly from the driver’s fee and pay it to the Italian tax authorities.
According to investigators, numerous foreign teams, including heavyweights like Mercedes or Red Bull, have not complied with this obligation during races on Italian soil.
Hundreds of millions of euros at stake
The investigations were initiated by a complaint from Bologna lawyer Alessandro Mei and research by tax expert Emilio De Santis. “It is undisputed: athletes who earn income in Italy must declare and tax it here,” says Mei. Due to the enormous fees of the drivers, tax evasion amounting to hundreds of millions of euros is being discussed.
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Particularly explosive: The investigations are still in an administrative phase, but should the allegations be substantiated, teams face massive back payments and severe penalties. Formula E is also said to have already come under the authorities’ scrutiny, where races were held in Rome and Misano.
The discussion is not entirely new. Already in 2020, there was a parliamentary inquiry in the Italian Senate calling for a more efficient model for collecting taxes from foreign athletes. The fact that the authorities are now, in April 2026, taking such massive action shows that political pressure on the sport is growing.
While Ferrari, as an Italian team based in Maranello, is unlikely to be affected by these specific checks, as they are already taxable in Italy, it could become uncomfortable for the other racing teams. Should Italy enforce its tough stance, this could have a signaling effect for other EU countries.
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