MotoGP riders are required to pay taxes on their earnings in India due to their participation in the Grand Prix held in the country. This news may not come as a surprise, considering the various challenges faced in India related to the organization of the Grand Prix. Despite the issues, the race at the Buddh Circuit continues, albeit with some delays in certain practice sessions.
The tax issue came to light in July, when MotoGP factory teams were asked to share the contracts of their factory riders, such as Marc Márquez, Fabio Quartararo, Pecco Bagnaia, Aleix Espargaró, Brad Binder, and other official riders of each brand, with the promoter and local authorities. This is because they are required to pay 1/20 of their annual salary as tax in India.
To have a clearer idea: if Marc Márquez earns between 15 to 18 million at HRC Honda, 1/20 of that amount, which is exactly 750,000 euros, has to be taxed at 20.80% in India. This means he will have to pay about 36,057 euros in taxes. Similarly, riders who earn an annual salary of 500,000 euros would have to pay 20.80% of 25,000 euros, which is equivalent to 1,201 euros, to the Indian government for their participation in the Grand Prix. Many MotoGP riders, including Pol and Aleix Espargaró, Brad Binder, Alex Rins, Augusto Fernández, Fabio Quartararo, Maverick Viñales, Joan Mir, and Jack Miller, have their tax residence in Andorra, where they only pay 10% of their income as tax. These riders, unaware of the tax obligation in India, refused to pay the tax, as it would be the first time they would be taxed outside their country of origin or tax residence just for participating in a Grand Prix in a foreign country. As a result, the manufacturers themselves, including Honda, Yamaha, Ducati, Aprilia, and KTM, covered these tax costs. Interestingly, Ducati was the last to make the payment, doing so immediately before the Grand Prix for their factory riders Bagnaia, Pirro, Martin, and Zarco.Private teams in the premier category, such as GASGAS Tech3, LCR-Honda, and Prima Pramac, do not need to worry, as their riders are directly linked to the KTM, Honda, and Ducati Corse factories, which have already made the necessary tax payments. As for teams and manufacturers in the Moto3 and Moto2 categories, they are compensated by Dorna and IRTA for participating in the GP and do not have to give up a portion of their annual income. This agreement was made by Dorna with the Indian authorities. However, KTM, Husqvarna, or GASGAS in the Moto3 and Moto2 categories have filed and paid taxes for all riders covered by their contract.
After that, Indian tax authorities will issue tax payment certificates to the riders, who can then claim or deduct them in their tax returns in their home countries. This way, riders will not be taxed twice due to double taxation agreements. However, teams and riders demand that this tax requirement be eliminated if another MotoGP event is held in India next year, as such a requirement is not imposed in any other country during the competition.
