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Indian Grand Prix in trouble?


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#1 KWSN - DSM

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Posted 26 July 2013 - 21:56

I have searched and could not find this one mentioned, if already part of a thread I appologize:

Question asked by Dieter Rencken I have cut and pasted the question and the two replies:

Q: (Dieter Rencken – The Citizen) I don’t know who can answer this question but we spoke about the future of the German Grand Prix, I believe at 1pm there was a meeting with Mr Ecclestone about the future of another Grand Prix, namely the Indian Grand Prix which has certain tax issues. Earlier this week, Sochi announced their date for the 19th of October next year and I have spoken to representatives here who have confirmed the date. What is the future of the Indian Grand Prix and why could it possibly fall away, please?

JB: It was a private meeting so it’s not for public discussion. As far as I’m aware, the Indian Grand Prix is on the schedule and we’ll be going.

TW: Well, I think you know that the calendar is in the hands of the promoter and we have a great promoter, so wherever we need to go, we will go.


By the reply from Booth, obviously there was a meeting I do not see anything reported on the front page, anyone here who can add anything to what this is all about?

:cool:

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#2 P0inters

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Posted 26 July 2013 - 22:06

Who is replying ? Is it Button and someone else ?

#3 sock22

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Posted 26 July 2013 - 22:10

Who is replying ? Is it Button and someone else ?

It's John Booth and Toto Wolff in Friday's team principal press conference

#4 Ross Stonefeld

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Posted 26 July 2013 - 22:15

India wants to tax people working in their country, F1 doesn't want it, Ecclestone is 'negotiating'.

#5 KingB

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Posted 26 July 2013 - 22:23

It's said, that India and Korea will most likely lose their races next year.
And possibly they won't go to india this year...

#6 KWSN - DSM

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Posted 26 July 2013 - 22:42

Thanks all.

Why is AutoSport not carrying this as a story? Even the potential is newsworthy and was raised as a question by one of their contributors at todays presser.

:cool:

#7 Deluxx

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Posted 26 July 2013 - 23:08

It's going to happen... they need to do a few more races to recoup what they used to build/renovate the place

#8 Kristian

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Posted 26 July 2013 - 23:18

Good. There's been two totally uninspiring races on a totally uninspiring track; I cannot even picture what it looks like right now.

As for Korea, the circuit has potential but also the races there are totally forgettable unless rain is invovled, and the building site setting is just an embarrassment to F1.

Whilst circuits in these 'new world' countries such as Sepang and Shanghai have grown in fans' affections, I can't see the same happening with these two.

#9 BoschKurve

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Posted 26 July 2013 - 23:43

Good. There's been two totally uninspiring races on a totally uninspiring track; I cannot even picture what it looks like right now.

As for Korea, the circuit has potential but also the races there are totally forgettable unless rain is invovled, and the building site setting is just an embarrassment to F1.

Whilst circuits in these 'new world' countries such as Sepang and Shanghai have grown in fans' affections, I can't see the same happening with these two.


Korea has no potential.

It's a garbage circuit design in the middle of a garbage location.

#10 R Soul

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Posted 27 July 2013 - 00:30

Don't be silly. They're going to build a big city around it, everyone knows that.

#11 OldSoldier2

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Posted 27 July 2013 - 03:36

As the topic is India, not Korea, here is what Saward wrote http://joesaward.wor...ons-over-india/

The problem is red tape. Joe also comments on Germany.

#12 loki

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Posted 27 July 2013 - 04:43

India wants to tax people working in their country, F1 doesn't want it, Ecclestone is 'negotiating'.


It's common to tax companies working abroad but the way India wants to do it is not the norm. Typically a company is taxed on the amount of revenue they generate in a particular country. Fair enough though I know of no country that taxes motorsport or any professional sport when it comes internationally to compete. However, India considers the revenue to be the companies and drivers gross revenue divided by 20, the number of Grands Prix. Clearly, the Indian GP does not account for 1/20 of an F1 team or the drivers income.


#13 SpaMaster

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Posted 27 July 2013 - 05:08

I don't see what's the issue here. Where is any mention of pulling out of India? Not that India or its people care.. It only mentions about certain tax issues. Whatever they could prove as income from the GP in a convincing way should help the case. They already get breaks from the State Government. The discussion has always been with the Central Government. 1/20 races is not a bad starting point. After all, I don't think F1 is doing any free service by coming to India for less money. The teams and promoters can show the right money they get from the local organizers and TV revenue and present a convincing case if they have one. If they don't like it, they can leave India. I certainly don't think the government or the local people are so desperate by F1 to be tricked by Ecclestone's usual negotiation tricks. Indian and its govt. is one place Ecclestone's shenanigans won't work, in that, it is the irresistible force vs immovable object, in the respective ways they operate.

In this context, the title 'Indian Grand Prix in trouble' is not accurate. More like, 'Indian Grand Prix may be lost', or, 'Indian Grand Prix may get away' something like that.

Edited by SpaMaster, 27 July 2013 - 05:15.


#14 loki

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Posted 27 July 2013 - 05:23

The problem with using the 1/20th scale is that someone like Vettel who gets bonuses from winning other races or with sponsorship deals that have nothing to do with India is being taxed on income that has nothing to do with India. 1/20th is 5%. For an earner like Alonso that amounts to a $1.5 mil tax on an income of 30 mil, little of which is either made directly in India or directly from the India GP. There's no Concorde agreement right now and when push comes to shove, the teams and drivers aren't going to pay on that scale. It's been diffused by JayPee as initially they picked up the customs fees and were able to come to terms on the taxation issue but it's not a new issue. At the time there were rumblings that the teams would boycott though a deal was reached to avert the crisis. There are other locales that want the date and are easier to work with that can take any vacancy resulting from the loss of the race.

#15 aray

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Posted 27 July 2013 - 07:13

It's said, that India and Korea will most likely lose their races next year.
And possibly they won't go to india this year...

that will be farce.. :down:

#16 Goron3

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Posted 27 July 2013 - 07:18

I wouldn't miss India tbh. For a country that's so beautiful to have a dull uninspired layout is such a shame. It's frustrating because the second half on the track is great but the first half is just generic Tilke stop and go. Korea too.

#17 SpaMaster

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Posted 27 July 2013 - 07:26

A circuit hosting a Grand Prix or not has nothing to do with the quality of the circuit.

#18 SilentKiller

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Posted 27 July 2013 - 08:12

Delhi is not the right place for an F1 circuit. Yes, there are lot of rich people there who may buy tickets for what will be a so called an Elite affair, but the motorsport culture is most strong in the southern part of the country.
Chennai, Bangalore, Coimbatore, Hyderabad and even Mumbai would have been better choices. The seats will be filled more for an F1 race in these cities.

#19 Ross Stonefeld

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Posted 27 July 2013 - 10:59

I'd rather break my tax bill up into 20 chunks, I'm more likely to be allowed to use the minimum allowance more times. If every country lets you earn 10,000 before you get taxed, that means I get the first 200k tax free.

Then again so few of these drivers are paying any tax I can see why you wouldn't want to pay Indian taxes. Or why track&field people don't want to pay a % of their income when they play in the UK, etc.

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#20 August

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Posted 27 July 2013 - 11:27

India is a decent circuit but not quite the best of the new circuits so I wouldn't miss it too much. But I think Indian GP would have been better for the business than e.g. Bahrain, India is much larger a country.

And horrible if such a traditional racing country like Germany loses its race.

#21 Ensign

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Posted 27 July 2013 - 17:38

Good riddance. The two races there have been a bore.

#22 Disgrace

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Posted 27 July 2013 - 17:41

In terms of the circuit, the loss of the race will in fact be no loss at all. A complete waste of an opportunity.

#23 akshay380

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Posted 29 July 2013 - 07:18

Being reported in the local media now. I better book my tickets for this years GP.
Indian F1 Grand Prix faces axe in 2014

#24 Nemo1965

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Posted 29 July 2013 - 08:00

In terms of the circuit, the loss of the race will in fact be no loss at all. A complete waste of an opportunity.


But that is another topic, right?

#25 f1fan1998

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Posted 29 July 2013 - 08:32

http://www.forbes.co...ge-on-tax-laws/

It's been the same in the UK for sometime, with Usain Bolt being the most vocal I can recall.

I understand that he doesn't want to race in the UK and give away a significant chunk of his income / rewards. Why should he? Does he benefit in anyway from that payment? No. Do the UK benefit from his appearance? Yes. So the deal is massively unfair.

There is always talk of economic value of sporting events. Well, for sure, those events would not have the same impact if the so-called superstars were not present. Would 60,000 people have turned up to watch Mark Lewis Francis last Friday night? No way.

Would 100,000 people turn up to Silverstone to watch James Calado in GP2? No way.

So you see my point perhaps. You can't have the economic impact without the superstars and if you tax them to oblivion, they will just find somewhere else to take their ball and play.

Back to the point and it does make one wonder if the same laws are applicable in the UK, why are they kicking up a fuss about India? It's most likely just a convenient way to get india off the calendar and a more profitable race (New Jersey? Russia?) on the calendar.








#26 Jon83

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Posted 29 July 2013 - 09:20

I don't really think India is any better or worse than most of the other 'new' circuits.

#27 sportyskells

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Posted 29 July 2013 - 09:35

we might need to lose this GP as do not forgot we have a returing GP next year so it will help out the dates when we get them

joined just a few days ago and 1st post

#28 wj_gibson

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Posted 29 July 2013 - 09:45

The fact that Sochi has apparently been given the weekend that India has occupied since 2011 (i.e. the third weekend in October) hardly augurs well for India, eh?

#29 Jimisgod

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Posted 29 July 2013 - 09:45

Good ridance. Awful track. At least it rained in Korea.

Bring on Austria!

#30 Ross Stonefeld

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Posted 29 July 2013 - 11:09

http://www.forbes.co...ge-on-tax-laws/

It's been the same in the UK for sometime, with Usain Bolt being the most vocal I can recall.

I understand that he doesn't want to race in the UK and give away a significant chunk of his income / rewards. Why should he? Does he benefit in anyway from that payment? No. Do the UK benefit from his appearance? Yes. So the deal is massively unfair.


I don't think I'd tax endorsement income, but don't things like Athletics and Tennis(and I guess golf?) pay significant event-specific prize money? On paper at least that should be earnings on work in Country X.

#31 Mandzipop

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Posted 29 July 2013 - 11:28

This topic is about the Indian GP, not other races. Anyone wishing to discuss the loss of other races please start up a new thread.

#32 HuddersfieldTerrier1986

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Posted 29 July 2013 - 11:30

Seen a couple of suggestions that they could skip 2014 and then come back in 2015 with an early season slot

#33 joshb

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Posted 29 July 2013 - 11:31

I hope not. It's a fix, first Valencia, now India maybe. They'll take Suzuka, Korea and Bahrain next!

Should've got rid of Hungary!

Bias off


#34 wj_gibson

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Posted 29 July 2013 - 11:46

Seen a couple of suggestions that they could skip 2014 and then come back in 2015 with an early season slot


Isn't March-April the hottest time of the year in Delhi, though? It could be unbearable.

#35 techspeed

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Posted 29 July 2013 - 13:20

However, India considers the revenue to be the companies and drivers gross revenue divided by 20, the number of Grands Prix. Clearly, the Indian GP does not account for 1/20 of an F1 team or the drivers income.

This is the bit everyone has missed. India doesn't want to tax the profits, but to tax the income.

If a team generates £50 million in sponsorship and race fees and then spends all of that money on developing the cars and paying the bills they would end up with no profit or even a loss, and in most countries that means no corporation tax to pay if the company hasn't made any money. India wants to tax the teams on 1/20th of the £50m income.

If you spent £50,000 buying in stock that you then sold on for a small profit, but you couldn't sell all of it so you ended up taking only £45,000, you would have lost £5,000 so most governments would not demand any corporation tax. India wants to tax the teams on gross revenue, so in this case India would still be taxing you based on the £45,000 income, not on the fact you lost money.

So for the top teams getting through £300 million gross income, India would be wanting tax from £15 million of that, and as corporate tax for non resident companies is approx 42% it means India would be demanding up to £6.3 million in taxes from each team.

If the Indian Revenue Service doesn't back down then that will be the end of the Indian GP.

Edited by techspeed, 29 July 2013 - 13:21.


#36 SpaMaster

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Posted 29 July 2013 - 13:59

Being reported in the local media now. I better book my tickets for this years GP.
Indian F1 Grand Prix faces axe in 2014

Again, such a condescending title, not surprising from TOI anyway. More like, 'F1 not much welcome in India', 'India not desperate for F1'..

http://www.forbes.co...ge-on-tax-laws/

It's been the same in the UK for sometime, with Usain Bolt being the most vocal I can recall.

I understand that he doesn't want to race in the UK and give away a significant chunk of his income / rewards. Why should he? Does he benefit in anyway from that payment? No. Do the UK benefit from his appearance? Yes. So the deal is massively unfair.

..
So you see my point perhaps. You can't have the economic impact without the superstars and if you tax them to oblivion, they will just find somewhere else to take their ball and play.

Sorry Usain Bolt or F1 in UK is not the same as F1 in India. Massive difference.

Are you kidding me about the bolded part? The superstars should not be taxed then. Are they doing all this for charity? If they intend to make income, they can be expected to pay income tax.

The fact that Sochi has apparently been given the weekend that India has occupied since 2011 (i.e. the third weekend in October) hardly augurs well for India, eh?

Non-sense. India does not care. This event is not sponsored by the Government of India. Don't be delusional that the country of India is desperate about this GP.

Edited by SpaMaster, 29 July 2013 - 14:08.


#37 vas04614

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Posted 29 July 2013 - 14:34

Being fan from INDIA its a bit disappointing to loose GP, but they are earning profits from the event and should definitely be taxed. And compared to other countries it could be high in INDIA but then not every country has same taxation rules.

BTW, Would need to book tickets this time if its last time :)

#38 Brandz07

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Posted 30 July 2013 - 12:42

'Formula 1 Boss Bernie Ecclestone confirms that there will be no Indian Grand Prix in 2014. #F1'

@Sports_NDTV

#39 F.M.

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Posted 30 July 2013 - 13:31

But will be back in 2015 with an early season date!

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#40 Atreiu

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Posted 30 July 2013 - 14:18

They could have skipped it altogther...

#41 DutchQuicksilver

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Posted 30 July 2013 - 14:32

Good riddance. With Korea and India gone, at least two Tilke/Red Bull/Vettel tracks dissappear from the calendar.

#42 HuddersfieldTerrier1986

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Posted 30 July 2013 - 14:35

Good riddance. With Korea and India gone, at least two Tilke/Red Bull/Vettel tracks dissappear from the calendar.


Korea hasn't gone. It's still there. We've never had anything other than rumour or speculation that Korea will be dropped (certainly not that I ever remember seeing).

#43 DutchQuicksilver

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Posted 30 July 2013 - 14:37

The Korean Grand Prix looks set to join India in being axed from the Formula 1 calendar, as Bernie Ecclestone trims the 2014 calendar to a maximum of 20 races.

It has been reported that Austria, Russia and New Jersey are to be added to the current 19-race schedule.


http://www.gptoday.c...in_near_future/

Though that article also suggests New Jersey not going to happen in 2014 either.

#44 William Hunt

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Posted 30 July 2013 - 14:54

I actually thought the Indian track is a pretty good circuit.

Edited by William Hunt, 30 July 2013 - 14:59.


#45 OldSoldier2

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Posted 30 July 2013 - 15:34

I actually thought the Indian track is a pretty good circuit.

It's not - it is the taxes and the bureaucratic red tape.

Korea also has a contract until 2016. Guess things can change.

Be nice to see democracies favored over countries like Russia, Hungary, and the Middle East sheikdoms, but Bernie doesn't consider things like that.

#46 tormave

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Posted 30 July 2013 - 16:32

But will be back in 2015 with an early season date!

There's no way in hell the teams and drivers will agree to pay 70% tax to India out of 5% of their revenues. No way. Unless the Indian authorities back off, the race is as dead as the dodo.

#47 Amphicar

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Posted 30 July 2013 - 17:30

It's not - it is the taxes and the bureaucratic red tape.

Korea also has a contract until 2016. Guess things can change.

Be nice to see democracies favored over countries like Russia, Hungary, and the Middle East sheikdoms, but Bernie doesn't consider things like that.

Hungary has been a democratic, parliamentary republic since 1989.

#48 Briz

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Posted 30 July 2013 - 17:45

This is the bit everyone has missed. India doesn't want to tax the profits, but to tax the income.

If a team generates £50 million in sponsorship and race fees and then spends all of that money on developing the cars and paying the bills they would end up with no profit or even a loss, and in most countries that means no corporation tax to pay if the company hasn't made any money. India wants to tax the teams on 1/20th of the £50m income.

If you spent £50,000 buying in stock that you then sold on for a small profit, but you couldn't sell all of it so you ended up taking only £45,000, you would have lost £5,000 so most governments would not demand any corporation tax. India wants to tax the teams on gross revenue, so in this case India would still be taxing you based on the £45,000 income, not on the fact you lost money.

So for the top teams getting through £300 million gross income, India would be wanting tax from £15 million of that, and as corporate tax for non resident companies is approx 42% it means India would be demanding up to £6.3 million in taxes from each team.

If the Indian Revenue Service doesn't back down then that will be the end of the Indian GP.



Being fan from INDIA its a bit disappointing to loose GP, but they are earning profits from the event and should definitely be taxed. And compared to other countries it could be high in INDIA but then not every country has same taxation rules.

BTW, Would need to book tickets this time if its last time :)


Well if income is being taxed without taking expenses into consideration that's just sick and no point at all to consider it unfortunately. This tax could eat up the profit of a team for the whole year or as techspeed suggested, turn a profitable year to a losing year. Taxing income is terribly wrong as it discourages working on a small margin.


#49 speednerd

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Posted 30 July 2013 - 18:03

Well if income is being taxed without taking expenses into consideration that's just sick and no point at all to consider it unfortunately. This tax could eat up the profit of a team for the whole year or as techspeed suggested, turn a profitable year to a losing year. Taxing income is terribly wrong as it discourages working on a small margin.


I'm sorry, but I'd like to see a source on that one. Taxation laws in India usually don't work like that. Taxation on revenue rather than profits? I've never heard that before...

Edit: yup, just checked various news sources. They say that the revenue would be subject to tax. I think that techspeed's assumption is wrong. Tax in India is calculated after deducting costs, just like anywhere else in the world.

Edited by speednerd, 30 July 2013 - 18:11.


#50 chumma

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Posted 30 July 2013 - 18:10

Good. Horrible track. Tilke, pulleth the finger outeth.