Former Yamaha and Ducati rider Jorge Lorenzo has won a big case, but not on the track, but in a Spanish court.
The five-time world champion has been at conflict with Spanish tax authorities for several years, but was recently found guilty, putting an attack to pay no less than 11.4 million euros out of the question.
Lorenzo’s defense revealed that he lived in Lugano (Switzerland) during those years. The court (TEAC) ruled in his favor and dismissed his case with the tax authorities.
However, the Spanish tax authorities did not give up Lorenzo and sent him another case, this time targeting his income in 2016, his final year with Yamaha. The case cost ‘only’ 7.8 million euros, with a fine of 3.6 million added for convenience.
The Spanish Ministry of Finance has therefore tried on two fronts to induce Lorenzo to pay a large sum of ‘back taxes’.
In the latter case, it was initially attempted to prove that Lorenzo had spent more than 183 days in Spain during the year.
But, as Spain’s ‘El Confidencial’ reports, according to the latest ruling by the Regional Economic Administrative Court of Catalonia (TEAR), the inspectorate could only provide evidence that showed a total of 168 days of residence in his native country. Less than the six months limit set by law for having to pay income tax in Spain.
At that point, the Spanish tax authorities changed strategy and focused on the four Grand Prix weekends Lorenzo went in Spain during the 2016 season, knocking on the door of Lorenzo’s motor home in the paddock to ask him a few questions.
The Revenue Agency used the case to try to prove that the Spaniard, who was riding for the Repsol Honda Team at the time, engaged in an economic activity in his home country.
They then asked for taxes to be collected on part of the salary he had from Yamaha during the season.
In the latter case, Lorenzo’s defense argued that it was not the rider’s voluntary choice to race in Spain. And that traditionally accepted residence criteria require voluntary and deliberate action by the taxpayer.
A peculiarity that does not coincide with this judging criterion, since it is organizer and MotoGP rights holder Dorna who decides on the specific circuits where the races will be held.
