Rossi has listed London as the location of his official residence since 2000, but this was disputed by the Italian tax authorities and lead to an investigation, which began last August.

The final deal reached will see Rossi pay 19 million euros in back taxes for 2001-2004, plus a further still-to-be-defined amount - as much as 16 million euros - for 2005 and 2006, meaning the Yamaha rider's potential payout could reach 35 million euros.

"I'm very happy with the way this difficult affair has turned out. I will be calmer now and that will help me to concentrate on my work," said a statement from the seven-times world champion.

"For several reasons I have already decided to return to live in Italy. London is a great city but spending more time with my family and friends has become increasingly important for me given that my MotoGP commitments mean that I spend more than half the year away from home.

"I could not return if I had problems with the Italian tax authorities and I could not allow this to drag on either. This agreement will allow me to relax and prepare for the new racing season."

The Italian tax authorities had originally claimed that Rossi could face a bill of 112 million euros.


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