Tax Authorities Launch Investigation Into F1 Drivers and Teams

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Tax Authorities Launch Investigation Into F1 Drivers and Teams

Originally posted on Athlon Sports | By Arman Khan | Last updated Apr 22, 2026 4:56 AM ET

Formula 1 is facing serious legal heat from Italy. The Guardia di Finanza, the financial crime unit operating out of Bologna, has opened a sweeping inquiry into whether foreign teams and drivers have been shortchanging Italian tax authorities for years. The potential bill, according to reports, runs into hundreds of millions of euros.

At the heart of the investigation are earnings generated at three iconic Italian venues, Monza, Imola, and Mugello, with the probe spanning five years from 2020 to 2024, as reported by Nicoletta Tempera of Bologna-based outlet il Resto del Carlino.

Why F1 Drivers Owe Tax in Italy

Italian law treats racing drivers as self-employed workers, meaning that any income they generate in Italy is subject to local taxation. The teams, in turn, are legally responsible for deducting and remitting that tax on their drivers' behalf, a process known as withholding.

F1 drivers with Grid Kids during the 2026 Japanese Grand Prix.Photo by Mark Sutton - Formula 1/Formula 1 via Getty Images

The specific mechanism at issue, called "ritenuta alla fonte," applies to both driver salaries and sponsorship revenue tied directly to Italian race events. While this obligation has existed for years, enforcement has historically been patchy. Authorities are now pushing for full retroactive compliance going back to 2020.

How the Investigation Started

The investigation gained momentum after a formal complaint was filed in June last year by Alessandro Mei, a Bologna-based attorney. His case drew on research conducted by tax specialist Emilio De Santis, whose earlier findings in 2020 had been significant enough to trigger questions on the floor of the Italian parliament.

Fans flood the Monza circuit during the 2025 F1 Italian Grand Prix podium ceremony.Photo by Guido De Bortoli/Getty Images

Mei has been vocal about why he pursued the matter. "There is no doubt that athletes earning income in Italy, regardless of where they live, must declare and pay taxes in Italy," he said, noting the case was too significant to ignore.

He has also brought in regional governments from Lombardy, Emilia-Romagna, and Tuscany to support the push for compliance around the affected circuits.

What F1 Drivers and Teams Could Face

The financial exposure is significant. Beyond the back taxes themselves, Italian law allows for criminal charges when the amount evaded exceeds €50,000, with potential penalties including heavy fines and prison terms of up to five years. While few expect anyone to end up behind bars, the tax agency has made clear it intends to recover every euro it believes it is owed.

No drivers or teams have been publicly named at this stage. The investigation remains ongoing, and with the 2026 Formula 1 season resuming at the Miami Grand Prix on May 3, it is a story the paddock will be watching closely.

This article first appeared on Athlon Sports and was syndicated with permission.

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