F1 » 10 September 2011
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."
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