Formula 1 News: Rescinded Italy law could cripple Ferrari

An Italian law was abolished at the beginning of January that will make it difficult for Ferrari to attract good F1 talent from outside Italy.

On January 1st this year, the Crescita Decree was lifted, almost five years after it was first passed by lawmakers in the Italian country. It saw significant tax breaks given to high-income people from other countries to entice them to work in Italy.

Many of Ferrari’s Formula 1 rivals are based in the UK, meaning many engineers that the Italian squad would be looking to poach from other teams are British.

As an example, Fred Vasseur can now forget any idea of poaching someone like Red Bull’s Adrian Newey to Ferrari.

The promise of significant tax breaks was no doubt a powerful weapon for Ferrari to use. Now that it is no longer the case, moving to Italy to work is likely to be much less appealing for many F1 engineers – especially those with families which would have to be uprooted and learn a new language.

And the F1 budget cap makes it very hard for a team like Ferrari to make up for it by simply offering higher wages instead.

Back in 2019, the Italian government modified a special tax regime for expatriate workers, wherein anyone who decides to live outside their native country and move to Italy can benefit from a 70% tax exemption on their personal income.

The tax bill, which was originally passed in 2015, had initially been restricted to EU nationals and Italian citizens registered with AIRE (the registry of Italian nationals living abroad); however, the bill was extended to citizens of any nationality, with which Italy has signed a treaty to avoid double taxation on income taxes or an agreement on the exchange of information on tax matters.