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F1 benefits from $27m Singapore tax windfall

NEWS STORY
02/10/2018

Newly released documents reveal that F1 is set to receive $27m in tax money previously withheld by the Singapore government.

"In January 2018 agreement was reached with the Singapore tax authorities regarding the refund of Singapore taxes, historically withheld from race promotion fees paid to the company by the Singapore race promoter," reveal the documents, according to Forbes.

"As a result of this agreement, Singapore taxes totalling approximately $27m will be refunded to the company. It is expected that the refund will be received during 2018, resulting in an overseas tax credit of the same amount in that year."

Though race agreements stipulate that fees must be paid free of all taxes, the authorities in Singapore still expected taxes to be paid even though, somewhat ironically, the government covers around 60% of the costs, with the remaining 40% covered by Ong Beng Seng, billionaire owner of many of the hotels that surround the track Singapore.

Previously, the race fees for Singapore are understood to have peaked at $61.8m, though under a new deal agreed with Liberty, which sees the race run until 2021, they have been reduced.

Readers may remember that previously there was a dispute with the authorities in India over tax on race fees for the event held at the Buddh International Circuit between 2011 and 2013, the Indian government even preventing F1 from getting the money from a bank guarantee which is a requirement of every race contract.

Last year, India's supreme court ruled that organizers should have deducted tax from the fees as F1 was trading in India according to the India UK Double Taxation Avoidance Agreement. Though the fees were eventually paid, it was revealed that F1 had allocated $20.5m to cover the tax bill and the interest on it.

Trebles all round.

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