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polakosaur
03-17-2004, 10:29 AM
read this http://www.tsn.ca/tennis/news_story.asp?id=76726

its a conincidence cause in my economics class we were just talking about customs taxes and stuff like that.

I was wondering how do tennis players for say live in spain and win money in america pay their taxes. and how about americans won win a wimbledon or other european tourney pay their taxes. what about other players of other sports like soccer and ice hockey. does anyone know anything about how their money situation works

chad shaver
03-17-2004, 11:35 AM
That's not even about prize money...it's about endorsements. That's a major load o' crap, IMO.

Ballmachine
03-17-2004, 11:36 AM
This is a very complicated issue, but I will try to make it as simple as I can. If you are an American Citizen, then you have to pay taxes on all of your income, even income that is earned overseas. However, you often have to pay taxes to the country that you earned that income in as well. Therefore, there are many, many laws regarding foreign earned income tax credits, whereby you don't exactly pay taxes twice, because you do earn a credit for taxes that are paid outside of the U.S. This is similar to earning income in one state, but living in another. You still have to file taxes for both states, but you do receive a credit on the state that you live in for the taxes that you paid in the state that you work in. It is a very complicated issue, with many laws and exceptions. That is why accountants get paid big bucks to handle Expatriate and Foreign National income tax returns.

This is also why many tennis players try to claim Monte Carlo as their home, because they do not have to pay taxes there. The trouble with that, is that many of the players have homes in other countries at the same time, such as Boris Becker, and the government counts the actual days that you spent in each home to determine where your true residence lies. This is why Boris got into so much tax trouble over the years in Germany.

I hope this helps answer your questions.

Rabbit
03-17-2004, 11:51 AM
The couple who used to own our company are in that situation. They got a boatload of money and for tax reasons have moved it offshore. It is very, very complicated.

From my view, Britan is making the same mistake that New York City did. New York City had a cash flow problem, and at the same time was one of the top convention centers in the US. They figured logically that they could tax the heck out of the tourist industry and get "free" revenue. What they didn't count on was everybody changing their venue from New York to other locations like Scottsdale Arizona. When they lowered their taxes, the tourists came back.

If England does this, they will reduce Wimbledon to a second rate event. John Lloyd, the one-time British number 1 and Davis Cupper, has already campaigned for Wimbledon to go to hard courts. He sees the demise in prestige that the tournament has with the younger players coming up. While I think hardcourts are a mistake, I do agree that Wimbledon is no where near the number one Grand Slam in the world any more. IMO, the French is probably the most prestigous. The US Open has an atmosphere that players either love or hate, and the ones who hate it (crowds and night matches) really hate it.

Bob Murray
03-17-2004, 12:08 PM
It's not like Andre can't afford it. He'll still be fabulously wealthy whether he pays or not.

Fat Boy
03-17-2004, 12:09 PM
Jeez, save your sympathy for those who deserve it, not a guy who probably earns more in a week than most of us do in a year.

If you earn money in a country, you pay income tax there. That's the rule in most all countries in the world. It looks like Agassi's accountants came up with some kind of tax avoidance scam to get him out of paying UK tax.

Tough sh1t that it didn't work.

Rabbit
03-17-2004, 12:43 PM
The way I read it, it's not money Agassi earned in Great Britan. It's a share of endorsement money that Great Britan thinks they're entitled to while he was in England. In other words, the money is paid to Agassi from Head in Austria. Now, he might owe taxes in Austria and the US, but how does England figure he owes taxes there? I could understand if it was money he earned from tournament play, but endorsements outside of England?

polakosaur
03-17-2004, 01:18 PM
so ballmachine your saying that if i'm an american citizen which i am, and i am also a polish citizen and i live in poland, i would pay my taxes to poland, and america would not get me unless i were to live there for a certain amount of time? and say i was to win a tournament in america, who would tax me?

chad shaver
03-17-2004, 01:29 PM
Rabbit,

You are exactly right. It's not about money he wins/earns at their tourny (which he pays, anyway), it's about money that Head and Nike pay him to use their products, whether he plays in England or not. Based upon this premise, every sponsored player from outside the US who plays in our country should have to pay taxes based upon his endorsement contract, just for wearing certain clothes or using certain equipment.

Fat Boy, did you even read the article? It's not about sympathy, it's about what's right and wrong. Period. End of story.

pound cat
03-17-2004, 03:14 PM
If a person owes money to a country which is legally entitled to money which that person owes , then that person has to pay money to that country.

Bob Murray
03-17-2004, 03:29 PM
Chad, your whole argument is wrong. If you don't understand read what PC wrote. Its about obeying the taxation laws of a country usually different to our own.

RacquetDoctor
03-17-2004, 03:57 PM
Read the article...sounds to me like GB is reaching. This ruling would mean that anyone receiving endorsement $$ would have to pony up if they played in their country...This opens up every tennis player, soccer player etc...

chad shaver
03-17-2004, 04:44 PM
Well then , Bob and PC, I suggest that our IRS start sending bills for back taxes to a whole lot of athletes from a lot of different countries.

Rabbit
03-17-2004, 06:39 PM
I understand obeying the laws of another country, when in Rome...

But, does this mean that if a normal citizen from the U.S. visits Great Britan they are subject to taxiation based on what they make in the U.S.? Certainly while Agassi is in GB he's making endorsement money, but how is that different than say me visiting Great Britan and being paid while on vacation? Would I owe taxes based on the vacation pay that I was receiving? Sounds to me like a scam...

chad shaver
03-17-2004, 06:44 PM
Rabbit,

I think some folks can't get past the "rich guy don't wanna pay taxes" idea.

Fat Boy
03-17-2004, 10:07 PM
The UK is not some banana republic extorting cash out of visitors. It has a complicated and sophisticated tax system, and the rights of the individual taxpayer against the state have been jealously guarded by the courts for 200 years.

The press story does not contain enough information for a sensible analysis. However, if you carry on a trade in the UK, which is what Agassi will have been doing, then you have to pay UK tax. If Head pay him for using their equipment in the UK, then that may count. Believe me, the court would have looked very closely at the facts and the law.

Rabbit, if you do some vacation work in the UK, you will be due to pay UK tax on your earnings (the first $8,000-odd are tax free). You will ot be liable to pay UK tax on your US income unless you are resident in the UK.

I could go on.... and on...

but I sense eyelids drooping across the globe..........

Cypo
03-18-2004, 01:12 AM
If I were Agassi (or any player), I would certainly weigh in that playing Wimbeldon is going to cost be an additional 50,000 $ (or whatever) in taxes before I committed to playing there.

baseliner
03-18-2004, 03:59 AM
Kind of scary for someone to look at the issue as one of soak the rich as in "he has enough let him pay". UK has a tax code evidently where if you are in that country they can tax you pro rata on what you earn elsewhere, i.e. if you make one million a week in endorsements year round from Head for example and you play Wimby and another grass court warm-up event for a total of 4 weeks in the country you owe taxes on 4 million based on time in the country, not based on what you earned in the country. They are going after AA because of deep pockets. The average tourist doesn't make enough to bother (or there is an alternate minimum before the tax kicks in--I'm not a UK tax expert).

Fat Boy
03-18-2004, 04:11 AM
Not sure why I'm bothering to try and educate you dopes, but...

Agassi is paying tax on his UK earnings. Not on a fraction of his year round earnings across the world. He entered into a dodgy tax avoidance scheme. It failed.

US citizens who live in the USA do not pay UK tax, except on UK source income, like Wimbledon prize money. This is because they are not tax-resident in the UK, and not because they aren't as rich as Agassi.

In this respect the UK tax system is pretty well identical to all other countries in the world.

Except of course the USA, which uniquely taxes its citizens even if they do not live in the USA.

Rabbit
03-18-2004, 04:49 AM
Fatboy - call me dense (and you probably will), but this appears to be taxation of income that is external of Great Britan. In this example, let's take the money he's paid from Nike. Nike is based in Oregon and they pay money to an American citizen. How then is England entitled to money earned not sourced in England?

In my vacation example I was referring to the money I would make while on vacation, not working in England on vacation. Likewise, Agassi has what I would assume is a term contract with Nike. If they don't pay him during the month he's in England, does he still owe taxes on his income?

If Agassi and Graf vacation in England, he is still getting endorsement money. Does he have to pay taxes on the money he earns while on vacation in England? If so, that could really translate to a very expensive vacation, especially if both are still under contract.

I also think it naive to think that any taxation is fair or equitable. In this country it's a redistribution of income, from the citizens of the US to the Congress. :shock:


Chad- I think you and I are on the same page here.

Bertchel Banks
03-18-2004, 05:28 AM
so ballmachine your saying that if i'm an american citizen which i am, and i am also a polish citizen and i live in poland, i would pay my taxes to poland, and america would not get me unless i were to live there for a certain amount of time? and say i was to win a tournament in america, who would tax me?

All american citizens are required to file taxes, even the ones who live overseas.

I'm no tax expert, but I"ll chime in anyhow.

Nike is based in Oregon and they pay money to an American citizen. How then is England entitled to money earned not sourced in England?

Because the money is earned (like you said), in England, and is thus income from that country.

In my vacation example I was referring to the money I would make while on vacation, not working in England on vacation.

Business or Pleasure? Once money exchange hands it's no longer considered vacation. I'd guess there would be a set minimum.

Rabbit
03-18-2004, 05:42 AM
Bertchel- ok let's try this two ways.

My family and I go on vacation to England. Like most people who work, I will receive a pay check for the time I'm on vacation. Ergo, I am being paid while on vacation.

1. While on vacation, we do nothing but the usual tourist stuff. Do I owe taxes on the money I made from my only source of income back in the States?

2. I talk to a Englander about computers while in England. This is not an interview, just a casual conversation. Do I owe taxes in England for the money I made from my only source of income back in the States.

On the Agassi thing, I'm still unclear. He didn't earn his endorsement money in England. The check was cut in Beaverton Oregon and despoited in a bank in Las Vegas. It would seem to me that all Agassi has to do is negotiate a one month contract with Nike, in other words when the off season hits, December, he gets a one month contract that equates to his current yearly contract. If he gets $12 million a year now, $1 million a month, then under his new contract, he should get one lump sum payment of $12 million in December. Past that, Agassi has a handshake deal to wear Nike for the next year. After he completes his year, Nike then gives him another one month contract.

According to the letter of the law, the only thing Agassi has to do is make sure that he's in the United States for the month of December. If he can't do that, then they could take it to a one week or even one day contract.

Point being, if England chooses to tax this way, they will ultimately lose money instead of gaining it. I refer back to my original post on the subject. This will further degrade Wimbledon in the eyes of the younger players. If England chooses to tax professional athletes based on income made outside of the actual monetary reward made in England, then they will discourage the same athletes from pursuing any monetary rewards. Ergo, Wimbledon will become a 2nd rate tournament, and I would say that its stature would fall below even that of a Super 9. They already have a surface that the majority of pros don't want to play on, and if players are penalized with taxation beyond what other countries see as 'fair', then they are encouraging those athletes to bypass England all together. It could even mean that soccer tournments move out of England to a more tax-friendly country in Europe.

Bertchel Banks
03-18-2004, 05:59 AM
The UK is not some banana republic extorting cash out of visitors.

This is exactly what is sounds like. Lets not forget that is a country which invaded countries, enslaved its people, then "sold" these people back their freedom, and "sold" them back their country. And how about the way they bombed the Iraqis when they were late with their taxes.

After reading the article I can understand the reasoning, but find it unconscionable and covetous. I hope the players boycott.

Bob Murray
03-18-2004, 07:14 AM
Well then , Bob and PC, I suggest that our IRS start sending bills for back taxes to a whole lot of athletes from a lot of different countries.

Certainly if our IRS laws work like that otherwise you have no valid argument.

Rabbit, If Mr. Agassi's endorsement contracts have bonus payments written into them for achievements like winning wimby or appearing at wimby then by UK tax laws those bonus payments may fall under the classification of earned income since he earned the money for playing wimby. Who are we to discuss the legal and correct application of UK tax laws if we are not UK resident.

If UK tax laws harm support of their sporting events it's their business and is a different issue from Mr. Agassi's situation.

chad shaver
03-18-2004, 07:35 AM
It's not like Andre can't afford it. He'll still be fabulously wealthy whether he pays or not.

That's still your main concern. Also, LEGAL and JUST are two different things.

joe sch
03-18-2004, 07:46 AM
Very scarry that the UK is now attempting to tax indirect income from foreign temporary workers, ie endorsement $$$ From what I understand, the taxes are already pretty absurd in the UK and it has resulted in a talent departure for tax havens. This has been the case in many European countries and is one reason Monte Carlo is a favorite place for the rich & famous. I love Wimbledon and the other grass court tournaments and am really sad to see the UK attempt to take taxation to the next level since it will be hurting these events and this will add another reason for players to skip the almost extinct grass court events :cry:

Bob Murray
03-18-2004, 07:48 AM
Chad, Chad, Chad...

If our IRS laws work like that then so be it. The flaw in your argument was exposed and you can't take it.

chad shaver
03-18-2004, 08:23 AM
Bob,

You seriously overestimate yourself.

Bob Murray
03-18-2004, 09:14 AM
Who are we to discuss the legal and correct application of UK tax laws if we are not UK resident.

Chad, If you're a legal expert on UK tax laws please clarify Mr. Agassi's legal position and end this discussion. [/b]

Rabbit
03-18-2004, 09:53 AM
Who are we to discuss the legal and correct application of UK tax laws if we are not UK resident.

Bob Murray-Point well taken; let me rephrase then.

If England sees fit to tax money that has never been in their country, or never will be in their country, then I agree that the players should boycott Wimbledon. Let me see, what was the phrase...."Taxation without representation"?

I do agree with England on their value added tax. This is about as fair as you can get. You can't afford the tax added to something you want to buy, then you don't buy it. In the US, the government gets their cut first and leaves you with whatever they think you can get by on. That does not stop the wise men in Washington from exempting themselves from every law they see as unfair or oppressive.

But, in this case, it seems patently obvious to me that England has decided to put a value added tax on monies that were never English to begin with. I'm not anti-England, I would have the same problem with any such nonsense in this country. I am anti-tax especially in light of how my tax dollars are spent.

I guess I only get this way late March through mid-April. :x

polakosaur
03-18-2004, 10:03 AM
so ballmachine your saying that if i'm an american citizen which i am, and i am also a polish citizen and i live in poland, i would pay my taxes to poland, and america would not get me unless i were to live there for a certain amount of time? and say i was to win a tournament in america, who would tax me?

keep that in mind

All american citizens are required to file taxes, even the ones who live overseas.

so i would have to pay taxes to america on my earning in poland if i lived in poand?

can someones answer this

Fat Boy
03-18-2004, 10:09 AM
Some interesting points here through the abuse (yeah I plead guilty too) and confusion.

Point 1 - the UK's tax laws are the same as most other countries in this respect.

But, yes, the argument that Agassi spends 2 weeks a year in the UK and so should pay income tax on 2/52 of his endorsement income is a bit odd. If that indeed is what the case is about - I still suspect that he's done some sort of tax avoidance scheme and that the Press have over-simplified the issue.

Point 2 - it's possible that the UK has decided to ENFORCE its law more rigorously than other countries do. That may certainly lead to international sportsplayers deciding not to go to the UK.

As Cypo pointed out, it could cost you more than your winnings if you gotta pay tax on a proportion of your total income.

By the way joe sch, the UK is actually a well known tax haven for non-UK citizens who live here . They don't have to pay tax on their non-UK income. That's the main reason why there are so many foreign soccer players in the UK.

Fat Boy
03-18-2004, 10:14 AM
Just to answer polakosaur.

A US citizen living in Poland would pay Polish tax on his Polish income (subject to exemptions - Poland is keen to attract expatriates with tax breaks.)

He would also pay US tax, but with a credit for the Polish tax. The Polish tax credit is likely to be limited under the US Alternative Minimum Tax rules, which ensure that all US citizens pay some US tax.

It's the price you pay for Dubbya sending in the Delta Force when you get kidnapped in Peru...

polakosaur
03-18-2004, 10:20 AM
that sucks, like the dubbya joke though

chad shaver
03-18-2004, 11:21 AM
Who are we to discuss the legal and correct application of UK tax laws if we are not UK resident.

Chad, If you're a legal expert on UK tax laws please clarify Mr. Agassi's legal position and end this discussion. [/b]

1. I think we call that freedom of speech. I am entitled to my opinion, just as you are. Do you think that LEGAL and JUST are the same thing? You know it IS legal to stone women who have been raped in some countries.....

2. Are YOU a legal expert on UK tax laws? Please feel free to clarify any and all points of his case.

3. You seem pretty keen on me with this argument. Have we crossed words before?

Ballmachine
03-18-2004, 03:06 PM
I have read a lot of opinions on the tax subject here, and it is a very interesting topic. However, I do believe that Great Britain is really stretching their tax laws if they expect professional athletes to pay income tax to England on endorsement contracts that they secured outside of the country. If they do succeed in collecting this type of tax, then as many have mentioned already, professional athletes will avoid playing in England like the plague. They will only be hurting themselves in the long-run if that does happen.

To answer one of the posters questions about paying tax on income earned in Poland. If you are an American citizen, you have to pay taxes in America, no matter where you live or where you earned that income. At the same time, there are numerous (and I do mean numerous) tax credit laws to offset the effect of double taxation. In essence you would not have to pay taxes twice to both the U.S. and Poland.

In this case, Britain seems to want their cake and eat it to. They are really reaching.

Phil
03-18-2004, 04:01 PM
Chad - You may not have crossed swords w/Bob before; he's just a self-righteous troll who pops up quickly, issues some kind of "challenge", and then pops back into his hole, probably in Punxsatawny, PA.

chad shaver
03-18-2004, 04:27 PM
Phil, I didn't want to think that way, but now that you mention it........

I guess great minds DO think alike.

rommil
03-18-2004, 07:55 PM
You should talk, Chad...

chad shaver
03-18-2004, 07:59 PM
Rommil,

And your enlightened contribution to this thread would be__________.

Well?

chad shaver
03-18-2004, 08:10 PM
Rommil,

Do you have an opinion on this particular thread, or are you just trolling for a confrontation?

rommil
03-18-2004, 08:11 PM
Chad it would be that once your flaw is exposed, you try to wiggle your self in some desperate ways.

chad shaver
03-18-2004, 08:14 PM
Please elaborate as to where specifically I have tried to "wiggle". While you're at it, please render an opinion about the topic being discussed.

rommil
03-18-2004, 08:19 PM
Don't want to and don't have to elaborate.You know what, you are right. I am just trolling.I'm out.....

chad shaver
03-18-2004, 08:28 PM
Figures.

thatballwas_IN
03-18-2004, 08:37 PM
chad, you are a troll too.... check previous posts!

chad shaver
03-18-2004, 08:49 PM
I also live under a bridge and charge a toll to cross.

Bertchel Banks
03-19-2004, 05:23 PM
I also live under a bridge and charge a toll to cross.

LOL

But, yes, the argument that Agassi spends 2 weeks a year in the UK and so should pay income tax on 2/52 of his endorsement income is a bit odd.

Not exactly. I'm no lawyer or legal expert, but from a legal perspective it could be argued that if Nike and Head "do business" in the UK then all employees are liable for imcome earned from those companies. Agassi as a paid endorser for these companies' products is subject to income tax for the two weeks that he in effect sells to the British public the Nike and Head brands.

Then again if soccer players are protected because their clubs already pay taxes, why aren't Nike endorsers and Head endorsers protected since Nike-UK and Head-UK, respectively, pay taxes as well?


If that indeed is what the case is about - I still suspect that he's done some sort of tax avoidance scheme

I doubt it.