F1 Teams Dragged Into Italian Tax Battle After Bottas Sounds Alarm Over Imola

The tax dispute that has Formula 1 drivers nervous about racing in Italy could escalate into a major legal fight involving the teams themselves, with Italian authorities examining whether foreign outfits must withhold tax on their drivers' earnings.

Valtteri Bottas raised the issue publicly when asked about Imola possibly replacing one of the Middle Eastern races at the end of the 2026 season. "I don't know if you've heard about Italian taxes," the Cadillac driver said. "No driver really wants to race in Italy because of what happened there."

According to La Gazzetta dello Sport, Italy's tax authorities are investigating whether teams from outside the country should have withheld and paid a 30 percent tax on the portion of non-resident drivers' income attributable to the races at Monza and Imola. Drivers have reportedly been sent letters by Italy's financial police, the Guardia di Finanza, asking them to file tax returns on income earned in the country — in some cases going back seven or eight years.

Tax specialist Luca Del Federico told La Gazzetta the crux is whether a foreign F1 team, present in Italy for only a few days, counts as a "permanent establishment" that must act as a withholding agent. He pointed to a 2021 Italian ruling involving a French fashion company employing foreign models, which said a non-resident entity without a permanent establishment is generally not required to withhold.

Bottas has since stressed drivers have "no problem" paying tax as long as the rules are clear. Max Verstappen was blunter: "There is no tax issue. You just have to pay tax." With F1's planned season finale in Qatar and Abu Dhabi potentially threatened by the Middle East conflict, Imola waits on standby — and a tax bill may come with it.