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Tax headache threatens Indian GP

Teams face demands on income ahead of new event's debut.

Just as concerns over the readiness of the Buddh International Circuit appear to have been allayed by images from the new Indian Grand Prix venue, another problem has arisen to cast the event into doubt.

The troubled event now finds itself at the centre of a row between the twelve competing F1 teams and India's government, which believes that it is due a portion of the income the teams receive through the year as tax. Although other events find themselves in similar situations, the problem is usually taken care of by tax treaties, but the Indians have said that they will hold team directors personally accountable for the payment of the tax. The teams, in turn, have said that the issue is of enough significance to cast the event into doubt.

“It's a serious issue and it needs to be resolved,” FOTA chairman, and McLaren team principal, Martin Whitmarsh told speedtv.com, "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.”

The tax row looks set to rumble on against a backdrop of greater personal significance for those required to make the trip to India, following Wednesday's terror attack in host city Delhi.

Despite a dozen people being killed when a briefcase bomb exploded outside the city's high court, and reports suggesting that the result would raise concerns about the level of security with six weeks remaining before the grand prix is due to make its F1 debut, Team Lotus reserve - and Indian native - Karun Chandhok believes that there will be no threat to the race.

"I cannot recall sporting events such as [cricket] or the Commonwealth Games having problems," he told Britain's Daily Telegraph newspaper, "Geographically, too, the track is in Greater Noida, which is actually in Uttar Pradesh, a different state from Delhi."



Related Pictures

Click on relevant pic to enlarge
L-R: Sameer Gaur, MD & CEO of Jaypee Sports International, FIA technical delegate Charlie Whiting and Vicky Chandhok, President of the FMSCI
21.07.2011- Karun Chandhok (IND), Team Lotus, TL11
09.09.2011- Friday Practice 1, Martin Whitmarsh (GBR), Chief Executive Officer Mclaren
The main straight and grandstands at Noida, snapped Charlie Whiting`s visit to the Indian GP venue in February 2011
India flag
Spike Goddard (AUS) Sahara Force India F1 VJM07 Test Driver.
26.11.2014.
Spike Goddard (AUS) Sahara Force India F1 VJM07 Test Driver tests the Info Wing.
26.11.2014.
Spike Goddard (AUS) Sahara Force India F1 VJM07 Test Driver.
26.11.2014. F
Spike Goddard (AUS) Sahara Force India F1 Team Test Driver (Right).
26.11.2014.
Spike Goddard (AUS) Sahara Force India F1 Team Test Driver.
26.11.2014.
Spike Goddard (AUS) Sahara Force India F1 Team Test Driver.
26.11.2014.
Spike Goddard (AUS) Sahara Force India F1 Team Test Driver.
26.11.2014.
Spike Goddard (AUS) Sahara Force India F1 VJM07 Test Driver.
26.11.2014.
Spike Goddard (AUS) Sahara Force India F1 VJM07 Test Driver.
26.11.2014.
Spike Goddard (AUS), Force India F1 Team 
26.11.2014.
Spike Goddard (AUS), Force India F1 Team testing the info wing
26.11.2014.
Spike Goddard (AUS), Force India F1 Team testing the info wing
26.11.2014.
Spike Goddard (AUS), Force India F1 Team testing the info wing
26.11.2014.

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Cobalt

September 10, 2011 12:16 PM

Oh, get on with it!!! I move between 3 countries and make sure that I know tax laws in each. It is expected of everyone and no it is not extraordinarly comlicated:rolleyes: In some aspects F1 seems so naive and amateurish...

spaghettieddie

September 10, 2011 2:14 PM

All the teams should get together and buy some livestock, start with donkey's then maybe bring some cows (they love cows) some big fat chickens and.....well whatever is cheapest and looks healthy. Offer them as a gift to all the farmers in the area and tell them they will not get them if they(the teams) are taxed. That should solve the problem!:)



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