Rossi's Tax Woes Finally Settled - At A Price
In 2007, just as everything seemed to be going against Valentino Rossi, with the Yamaha M1 too slow and the Michelin tires seemingly unable to last an entire race, the Italian tax authorities added insult to injury by slapping a monster fine of 112 million Euros. Coming as it did just prior to the Brno round, the media attention distracted the Italian from racing, adding yet another obstacle in his path to regain the MotoGP title.
The dispute centers on the question of residence: Rossi is officially domiciled in London for tax reasons, as the UK has a very attractive tax regime for people who spend more than half the year outside the country. The Italian tax authorities, however, claimed that Rossi was actually living in Tavullia in Italy, finding evidence that Rossi owned several luxury cars in a house in Italy, as well as a yacht, and that as a consequence, the 7 time world champion owed Italian income tax over the money he had earned in the years between 2001 and 2006.
Now, Valentino Rossi and the tax authorities have reached an agreement over the issue. Rossi will pay 19 million euros over the years 2001 through 2004, and another yet to be decided sum over 2005 and 2006, with a grand total of some 35 million euros for the years 2001 through 2006. In exchange, the Italian tax authorities will drop any further claims against Rossi, and The Doctor will move back to live in Italy, without fear of any further retribution.
The Italian told the press that he was pleased with the settlement, as he is finding it more and more important to spend time with friends and family, and the agreement with the tax authorities means that he can focus on the 2008 MotoGP season without any further distractions from long and protracted legal proceedings over tax claims.