"The top five French players on the men’s circuit—Jo-Wilfried Tsonga,Gael Monfils,Gilles Simon,Julien Benneteau and Richard Gasquet, as well as Germany’s Philipp Kohlschreiber, all claim residence in Switzerland, ostensibly to avoid paying their home countries’ punitive 45% top personal income-tax rates (not including surcharges or social-security contributions).
Many Swiss cantons assess taxes on the living expenses of foreign high-rollers (typically fives times the market rate for renting out their residence) rather than on their income. As a result, Switzerland has become a tax haven for thousands of wealthy Europeans. Maybe New Jersey Gov. Chris Christie should consider applying the Swiss tax model in the Garden State. Jersey City might become the Geneva for New York’s professional athletes.
Yet the most popular haven for tennis players is the principality of Monaco, which doesn’t tax foreigners’ world-wide income. (French athletes choose Switzerland because la République Française taxes its citizens who live in Monaco.) Swedish tennis legends Bjorn Borg and Mats Wilander escaped to Monte Carlo during their primes in the 1970s and ’80s to dodge their home country’s 90% top marginal rate, which has since fallen to 57%. In 2002 Germany charged six-time Grand Slam title-winner Boris Becker with tax evasion for falsely claiming Monaco as his primary residence.
Today, Monaco is the putative home of many of the world’s top-ranked men and women players. They include Serbia’s Novak Djokovic (1), the Czech Republic’s Petra Kvitova (4), Tomas Berdych (7) and Lucie Safarova (16); Canada’s Milos Raonic (8); Denmark’s Caroline Wozniacki (8); Bulgaria’s Grigor Dimitrov (11); and Ukraine’s Alexandr Dolgopolov (23). Players who hail from former communist countries are especially keen, it seems, on keeping their hard-earned money.
The U.S. has its own Monaco: no-income-tax Florida. It’s no coincidence that America’s top-ranked players Serena (1) and Venus Williams (18) and John Isner (21), as well as Russia’s Maria Sharapova (2) and Japan’s Kei Nishikori (5) live in the Sunshine State. So do twins Mike and Bob Bryan, who have won 16 Grand Slam doubles titles. Like the Williamses, they come from California, where the 13.3% state income-tax rate is the nation’s highest."
Friday, April 10, 2015
Do Tax Rates Affect Where Tennis Players Decide To Live?
See How Tennis Stars Handle the Tax Man’s Topspin: Players like Nadal and the Williams sisters show excellent footwork when protecting their income by Allysia Finley (from the WSJ in January). Excerpts: