[Saba Sports News] Italian tax authorities have recently launched a large-scale investigation into Formula 1 drivers, targeting high unreported income earned during races in Italy. The total scale of suspected tax evasion is estimated at hundreds of millions of euros, involving dozens of drivers. Any unpaid tax bill exceeding €50,000 in a single instance will be considered a criminal offense, requiring full repayment plus heavy fines. Under Italian tax law, the Guardia di Finanza (Italian Financial Police) has ordered active and recently retired F1 drivers to submit their 2025 tax returns and undergo multi-year tax audits.
Previously, Italian tax authorities had long “turned a blind eye” to cross-border income, but a tip-off from lawyers triggered a thorough probe, finally breaking the unspoken industry rules. The central dispute revolves around the fact that many drivers are permanent residents of tax havens such as Monaco, where personal income tax rate is 0%, yet have failed to legally declare income from sponsorships, prize money and other earnings while racing in Italy. The investigation covers income related to Italy’s three circuits: Monza, Imola and Mugello, and includes reviews of driver contracts and sponsor agreements.
Earlier, Dutch driver Max Verstappen was thrust into the spotlight over tax avoidance. Dutch media reported that by relocating to Monaco, he may have avoided more than $200 million in taxes over 13 years. Arvid Lindblad has not been included in the investigation as he has never competed in an F1 race in Italy, leading fans to joke that he is the only driver “spared”.
In my opinion, while drivers’ long-term residency in Monaco is legal, they do face legal risks if they fail to declare income earned from races in Italy. Italy’s latest move aims to close past enforcement loopholes, representing a belated but intensified regulatory crackdown.