Valentino Rossi, seven time motorcycle world champion has this week been checked out for tax evasion by the Italian tax authorities and could face a criminal investigation. Valentino was reported by Italy’s tax agency to the public prosecutor’s in his home town of Pesaro, which is on the Adriatic coast. It was said that on Wednesday 8th August that the tax office was investigating 28 year old Vale for a possible $82.8 million undeclared earnings from 2000 to 2004. It is alleged that Valentino, who has been a British resident since 2000, has not declared any revenues from his team or sponsorship to either the British or Italian tax authorities.
The tax evasion stems from the authorities' claim that although Valentino Rossi was living in London at the time, he was merely resident there, and not domiciled for tax purposes, making Rossi liable for Italian income tax.
Rossi's decision to base himself in London is itself an interesting choice. The United Kingdom is not known for its extraordinarily low taxes, with the top level of income tax set at 40%, although this rate is considerably lower than other European countries, so moving to London would not appear to offer Rossi too much in terms of tax advantages.
Rossi could risk a fine of up to $69 million if he is convicted or even a one to three year prison sentence.
It is said that on Wednesday Rossi stated he had lived in London since 2000 but travelled seven months out of the year for work and also visited Italy to see family, friends and to go on vacation and that his advisers were "examining the question."
Valentino has 60 days to respond to the allegations.
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