Bottas tax controversy could trigger major F1 legal battle

The Italian tax controversy that prompted Valtteri Bottas to question a possible return to Imola could escalate into a major legal battle involving Formula 1 teams.

Although F1 has now confirmed Qatar and Abu Dhabi as the final two races of 2026, the dispute over alleged unpaid Italian taxes remains unresolved.

Bottas raised the issue when asked about Imola potentially replacing one of the Middle Eastern races.

"I don’t know if you’ve heard about Italian taxes," said the Finn.

"No driver really wants to race in Italy because of what happened there."

According to La Gazzetta dello Sport, Italian tax authorities are investigating whether foreign F1 teams should have withheld and paid taxes on the portion of drivers’ earnings attributable to races at Monza and Imola.

The authorities reportedly believe a 30 percent withholding tax should apply to non-resident drivers, with their teams responsible for collecting and remitting the money.

But Italian sports tax specialist Luca Del Federico believes the authorities could face a significant legal obstacle.

"Without knowing the tax assessment documents, it’s difficult to express an opinion, and the Revenue Agency’s work is certainly carried out with great care and professionalism," he said.

"However, something doesn’t add up."

"The fundamental question is whether a foreign Formula 1 team, present in Italy for a Grand Prix, can be considered a permanent establishment in our country."

Del Federico pointed to a 2021 Italian tax ruling involving a French fashion company employing foreign models for work in Italy.

"The Agency’s response was very clear: a non-resident entity, if it does not have a permanent establishment in Italy, is in principle not required to act as a withholding agent and therefore apply the withholding tax."

He argues that the temporary presence of F1 teams at Italian circuits is unlikely to meet that definition.

"The teams operate in Italy for just a few days," he said.

"Setting up the garages and conducting the race, in my opinion, are not sufficient to establish a permanent place of business."

Del Federico believes the distinction between a driver’s tax liability and a foreign team’s obligation to withhold that tax could ultimately become the centre of a major court case.

"It’s likely that a major tax dispute will arise," he predicted.

"And, given the relevance of the legal principle at issue and the figures involved, I wouldn’t be surprised if the case were to reach the Supreme Court."