• Indian Grand Prix

Drivers face taxing time in India

GP Week
October 3, 2011 « Delays cause concerns over inaugural US Grand Prix | Di Resta to show Suzuka 'respect' »
Leading drivers such as Sebastian Vettel might be left less than impressed with the Indian authorities unless a deal can be struck © Getty Images

While the Indian Grand Prix import duty tax row appears to have been resolved, concerns about punitive levels of tax for teams and drivers have not been so easily assuaged.

Negotiations with the relevant Indian authorities are still ongoing, but the Formula One world is worried that a race in India will see teams and drivers alike paying income tax in India - on a reported 1/19th of their annual earnings - as a consequence of spending less than a week racing in the country.

There has been no mention of similar tax demands on the media or team support staff, triggering the suspicion that the income tax row is merely an attempt to eke extra money out of what will be an expensive event to host. Tax law varies around the world, but it is highly unusual to pay income tax in a country one is simply visiting for the purpose of work.

FOTA chairman and McLaren team principal Martin Whitmarsh admitted to some concerns about the possible tax penalties of racing in India, but was unable to shed any light on the current state of affairs. "There are some concerns, and it's a concern for drivers as well as teams. It's quite a tough tax regime, but I'm certainly not competent to tell you exactly where we're at," Whitmarsh said. "But there is quite a lot of negotiation and discussion going on. I am sure we will race in India, but we need to resolve some of those issues."