Whitmarsh confirms tax dispute could threaten Indian GP

The Indian GP could be under threat because of a dispute between the F1 teams and the country’s tax authorities.

The Indian government is claiming what it believes to be its share of the annual incomes of the 12 teams, and directors of teams could apparently be held personally responsible for ensuring that the requested taxes are paid.

Driver earnings are also involved in the saga, and while they face issues in a number of countries, the teams as such are not usually involved in tax situations.

“It’s a serious issue and it needs to be resolved,” FOTA’s Martin Whitmarsh told this blog today. “And the teams need to receive the appropriate reassurance to be able to go to India.

“There is a significant worry and concern among the teams, and it needs to be resolved. I am sure it will be, but if it weren’t to be resolved then it would threaten the race, wouldn’t it?

“It’s an issue of withholding tax. It’s not an unfamiliar one. There are tax treaties between countries and it’s an extraordinarily complex matter. All of the financial directors within FOTA are working together and are very concerned about it. We’ve employed Ernst and Young as consultants to help find a solution, and hopefully we will.”

7 Comments

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7 responses to “Whitmarsh confirms tax dispute could threaten Indian GP

  1. Mick

    Who needs Ernst & Young. Bernie needs to meet with the Indian prime minister, do a secret handshake then just say to the BBC, ‘don’t worry, we’ll sort it’

  2. D

    Very strange that Bernie hasnt sorted this out already. If the teams have reached the stage of bringing in their own consultants it would appear Bernie wants nothing to do with it.

    And so the games begin, no doubt itll be someone elses turn to raise the prospect of the teams not turning up later in the weekend if this doesnt get enough attention.

  3. ronmon

    There are plenty of countries seeking a date on the schedule. Given the loads of money spent to build the track, India stands to lose a lot by making unreasonable demands.

    • Peter

      So this is how they’re planning to pay for the track!
      Third World Countries should not be allowed to dabble in the pinnacle of motorsport.

  4. Mick

    What a ridiculous remark Peter. From the various reports I’ve read I suspect that there are existing regional tax laws which could potentially impact the teams & some legal clarity is required. No-one is suggesting that new regulations are being made to extort money from F1.

  5. Every country on the current calendar must be having their tax laws and must be complied with anyone who wants to do business in those countries. Organized sports is a business and the country where a race is hosted expecting the income tax regulations be adhered is pretty fair.

    Given that India has dual tax agreements with most of the countries around the globe, the drivers who pay taxes in their own countries of residency should be ok as long as there exists a tax treaty between India and those countries.

    I suspect those drivers that reside in tax havens like Monte Carlo and Switzerland to avoid paying taxes in their own countries to start with will be under scrutiny here. And if India is standing up to these tax shirkers, all power to it.
    Somebody has to take stance against the tax shirkers.

  6. Vivek

    Peter, you seem to be an absolute fool, calling India a ‘Third World’ country. It just shows how ignorant you are. If it is, why are all you Europeans and Americans rushing to India to make money? If F1 wants to come to India, you jolly well follow the local tax laws.

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