Italian Tax authorities launch broad investigation into Formula 1 drivers

The Italian tax authority is intensifying its enforcement of national regulations, initiating a rigorous effort to collect taxes from Formula 1 drivers who have competed on Italian soil in recent years. This move, which targets both current and former drivers, threatens to create significant legal and financial complications for the sport’s participants and their teams.

According to reports from the Bologna-based newspaper Il Resto del Carlino, the Bologna branch of the Guardia di Finanza—Italy’s financial police—has begun a comprehensive investigation into F1 personnel. The inquiry focuses on whether taxes were properly paid on income generated during races held in Italy, including events at Monza, Imola, and the 2020 Tuscan Grand Prix at Mugello.

A shift toward retroactive enforcement

While Italian law has long required foreign athletes to pay taxes on income earned during sporting events within the country, enforcement has historically been inconsistent. This landscape changed following a request for a thorough investigation into the tax compliance of foreign athletes by Italian lawyer Alessandro Mei.

Sources indicate that the Guardia di Finanza is now auditing F1 drivers with unexpected depth. Authorities have begun contacting drivers via letter, requesting the submission of tax returns for the 2025 tax year and mandating that they—or their representatives—engage with the authorities to discuss further steps.

Crucially, the Italian tax authority intends to pursue this matter retroactively. Where legally permissible, they aim to collect unpaid taxes dating back multiple years. To facilitate this, investigators are reportedly seeking access to sensitive driver and sponsorship contracts to gain an accurate assessment of earnings.

Potential criminal consequences

The implications of this crackdown are severe. If the amount of unpaid tax for an individual exceeds €50,000, the failure to pay is classified as a criminal offence under Italian law. Beyond the potential for criminal charges, those found in violation face substantial financial penalties on top of the back taxes owed.

While the issue of taxing non-resident athletes was previously discussed in the Italian parliament in 2020 without resulting in significant action, the current mandate from the Court of Auditors has prompted the Guardia di Finanza to initiate a formal process across the provinces hosting these races.

As the investigation unfolds, the focus on Formula 1—driven by the high salaries of its competitors—places the sport at the center of a complex tax dispute that mirrors similar systems already in place in jurisdictions such as the United Kingdom, Australia, and the United States.