Not really thought about this before - tax rules

[christos_liaskos]

They were just talking on SKY about how Rafa is playing Halle instead of Queens next year. They mentioned the 'financial' reasons as probably being the main insentive. Here's the interesting point though. They weren't actually focusing on the point of appearnce fees, rather how much the players get taxed.

I'd always known that players have to pay tax on their prize money (apart from tax exempt countries of course) but Peter Fleming actually was talking about how the players also have to play tax on the sponsorship and endorsement deals for the time they are in a particular country.

The example he was giving with Rafa was that say he has 5million a year in sponsorship, that's roughly 100,000 a week. So if Rafa decided to play Queens, and lose in the first or maybe second round (as he has done in the past due to what RG takes out of him) then he still gets taxed my the inland revenue for that weeks wages. Therefore ends up losing money that week as what he pays out in tax is way more than what he's won in prize money.

Is that the same in all countries, and has it always been like this? I suppose logically the answered would be yes. I only ask because on SKY they seemed to be suggesting that these were new tax rules taken up by the inland revenue here in the UK and that had cost us the chance of seeing Rafa next year and why he chose Halle instead. So wont Germany have the same rules?

 

[Jeebs]

It's a UK thing. That's why a lot of top sportspeople only come here for the major events (see http://www.telegraph.co.uk/finance/...ax-rule-prevents-Usain-Bolt-from-running.html) The leading case actually involved Agassi playing at Wimbledon and was dragged out over years.

 

[christos_liaskos]

It's a UK thing. That's why a lot of top sportspeople only come here for the major events (see http://www.telegraph.co.uk/finance/...ax-rule-prevents-Usain-Bolt-from-running.html) The leading case actually involved Agassi playing at Wimbledon and was dragged out over years.

Wow that's a pretty interesting read. Ridiculous rules really. Surprised anyone ever bothers to play Queens, the tournament's actually done really well over the years in attracting the top players considering whoever plays here has to put up with that

 

[15_ounce]

http://www.guardian.co.uk/sport/2011/oct/13/rafael-nadal-uk-tax-queens

Rafael Nadal says UK tax demands put him off appearing at Queen's

• Nadal explains decision to pull out of Aegon Championships
• 'In the UK you have a big regime for tax ... this is very difficult'

Press Association
guardian.co.uk, Thursday 13 October 2011 13.14 BST
Article history

Rafael Nadal says tax laws made him pull out of next year's Aegon Championships at Queen's Club.

The world No2, Rafael Nadal, will not play at next year's Aegon Championships at Queen's Club, his traditional warm-up event before Wimbledon, due to the UK's tax demands.

Nadal, who won the tournament in 2008, will instead compete in the Gerry Weber Open at Halle in Germany, where he will receive a reported £750,000. However, he insisted that the appearance fee was not behind his decision, which was instead forced by British tax laws, which oblige foreign athletes to pay tax on their worldwide endorsements.

Nadal told the Times: "I like to play in all the tournaments where they really want me. It is good for tennis. There is a big change in Halle, they have wanted me to be there for the last few years but I really wanted to play in Queen's.

"The truth is, in the UK you have a big regime for tax, it's not about the money for playing. They [HMRC] take from the sponsors, from Babolat, from Nike and from my watches. This is very difficult. I am playing in the UK and losing money. I did a lot more for the last four years, but it is more and more difficult to play in the UK."

Roger Federer has also committed to the German event.

 

[christos_liaskos]

http://www.guardian.co.uk/sport/2011/oct/13/rafael-nadal-uk-tax-queens

Rafael Nadal says UK tax demands put him off appearing at Queen's

• Nadal explains decision to pull out of Aegon Championships
• 'In the UK you have a big regime for tax ... this is very difficult'

Press Association
guardian.co.uk, Thursday 13 October 2011 13.14 BST
Article history

Rafael Nadal says tax laws made him pull out of next year's Aegon Championships at Queen's Club.

The world No2, Rafael Nadal, will not play at next year's Aegon Championships at Queen's Club, his traditional warm-up event before Wimbledon, due to the UK's tax demands.

Nadal, who won the tournament in 2008, will instead compete in the Gerry Weber Open at Halle in Germany, where he will receive a reported £750,000. However, he insisted that the appearance fee was not behind his decision, which was instead forced by British tax laws, which oblige foreign athletes to pay tax on their worldwide endorsements.

Nadal told the Times: "I like to play in all the tournaments where they really want me. It is good for tennis. There is a big change in Halle, they have wanted me to be there for the last few years but I really wanted to play in Queen's.

"The truth is, in the UK you have a big regime for tax, it's not about the money for playing. They [HMRC] take from the sponsors, from Babolat, from Nike and from my watches. This is very difficult. I am playing in the UK and losing money. I did a lot more for the last four years, but it is more and more difficult to play in the UK."

Roger Federer has also committed to the German event.

Absolutely ridiculous. As long as he gets treated well by the tournament in Halle we could well not see him back at Queens ever again. Considering this I'm surprised any of the top guys opt to play there (in fact surely its's even harder for the lower player since they are obviously even less well off and don't want to be giving money away in tax. Then again I don't know if players outside the top20 really make anything from sponsorship and endorsments anyway so maybe they dont actually lose anything there?)

 

[pound cat]

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$



The Spaniard and Roger Federer are regularly paid guarantees. They are believed to have received more than $1million to play in certain events, particularly in the Middle East. Murray and Djokovic are not yet at that level, but can still get around $500,000.

And that’s not so much when compared with the $3m Tiger Woods could command in golf prior to his downfall.

 

[Moose Malloy]

I guess this can be added to reasons why Queens will never be a masters series event.

Kudos to Nadal for being honest on this, I have a feeling this has been a factor with others choosing Halle over the years, but its probably considered bad PR for a pro athlete to ever complain about money.

 

[MAX PLY]

How dare he? He should pay his "fair share." We should have an "Occupy Center Court" movement immediately.:twisted:

 

[marcub]

How dare he? He should pay his "fair share." We should have an "Occupy Center Court" movement immediately.:twisted:

Really dumb comment.

Ralph and some of the other guys have net worths north of 100M. And he's worried about paying tax for 1 week's earnings?!

It's glorified circus, for f*ck's sake!

 

[MAX PLY]

More power to Nadal--if he can make the same somewhere else and keep more of it, good for him! Let Queens compete for him and up what it is willing to pay. Taxes matter, even a week's worth (especially to a country that he doesn't live in)--and mind you, a week's worth of taxes on Nadal's earnings is not a small sum (and whether it is to him is really incidental). Even "glorified circus performers" should be entitled to keep what they can. The only thing that surprises me is that more of these guys don't relocate their "permanent homes" to Monte Carlo.

 

[Mustard]

Top level tennis players are paid ridiculous amounts compared to people in the real world, but what's all this about paying more in taxes than what has been won in prize money. What the heck? How can you be taxed for something that you haven't won?

 

[Jeebs]

Top level tennis players are paid ridiculous amounts compared to people in the real world, but what's all this about paying more in taxes than what has been won in prize money. What the heck? How can you be taxed for something that you haven't won?

Say you've got a £5,000,000 a year sponsorship deal - that works out to be roughly £100k a week. If come to the UK to play at Wimbledon but get put out at the end of the first week the taxman will want his cut on the £100k that you 'earned' in sponsorship while you were here. I don't know the tax rules for non-domiciles but someone in the UK earning that much would pay about 40%. So unless you're taking home more than that in prize money (which will get taxed too), you're looking at a loss.

 

[MAX PLY]

I suspect the tax is based on time spent in the UK against his world wide earnings. As such, it could indeed be severe (I suspect Nadal's tax planning/return is pretty complicated as is the case with most professional atheletes of his caliber)---he likely pays taxes in several countries, just like many of us in the US pay state taxes in many states where we may have business interests. Anyway, glad to see Nadal's apparently a member of the TEA Party.

 

[Mustard]

Say you've got a £5,000,000 a year sponsorship deal - that works out to be roughly £100k a week. If come to the UK to play at Wimbledon but get put out at the end of the first week the taxman will want his cut on the £100k that you 'earned' in sponsorship while you were here. I don't know the tax rules for non-domiciles but someone in the UK earning that much would pay about 40%. So unless you're taking home more than that in prize money (which will get taxed too), you're looking at a loss.

Yes, I see now. It's not the taxes on tournament prize money or appearances fees that Nadal has any problem with, but the taxes on worldwide sponsors which will leave Nadal looking at a loss if he doesn't get far enough in the tournaments. And, after all, the job of a professional sportsperson is to make money for themselves playing their sport, so why would they risk such a financial loss? It makes no sense why they would risk it.

 

[Bhagi Katbamna]

NY City is like that as well. It ends up being so bad that you have to prove that you weren't in NY City if you've paid taxes there and are in their system(or so I've heard).

 

[christos_liaskos]

Yes, I see now. It's not the taxes on tournament prize money or appearances fees that Nadal has any problem with, but the taxes on worldwide sponsors which will leave Nadal looking at a loss if he doesn't get far enough in the tournaments. And, after all, the job of a professional sportsperson is to make money for themselves playing their sport, so why would they risk such a financial loss? It makes no sense why they would risk it.

Yes seems you've got the idea now Mustard. Sorry, thought I'd explained it first time round but seems I didn't well enough. It is a ridiculous system really

 

[marcub]

More power to Nadal--if he can make the same somewhere else and keep more of it, good for him! Let Queens compete for him and up what it is willing to pay. Taxes matter, even a week's worth (especially to a country that he doesn't live in)--and mind you, a week's worth of taxes on Nadal's earnings is not a small sum (and whether it is to him is really incidental). Even "glorified circus performers" should be entitled to keep what they can. The only thing that surprises me is that more of these guys don't relocate their "permanent homes" to Monte Carlo.

My dear tea partei freund, Nadal is - firstly incommensurately greedy, if he can even begin to make a fuss about a 1-week "loss", really pocket change to him, given his fortune... and secondly - astonishingly dumb if he lets everyone know how greedy he is.

And you, my dear sir, I'm not sure you can even begin to realize how utterly ridiculous a guy with >100M in his bank account complaining about tax paid on 1 week's earnings is.

But hey... there's a song that goes well with Ralph's misfortunes this year: "Complain, complain, that's all you've done, ever since you lost..."

 

[Jeebs]

That's how the rich stay rich.

I can see the logic behind the judgment - that if Agassi's appearances in the UK serve to increase the amount he gets in sponsorship, which appearing at Wimbledon inevitably would - then the taxman wants a slice. It's just not pragmatic though.

 

[ark_28]

Interestingly Ussain Bolt did not run in London last year because of Tax Rules.

"Triple Olympic champion Usain Bolt has announced he will not compete at August's Aviva London Grand Prix because of Britain's tax laws.

The 100m and 200m world record holder may not now compete in the UK again until the 2012 Olympics.

New regulations mean the 23-year-old Jamaican could lose more money than he would earn from competing at the Crystal Palace Diamond League event.

"I am definitely not going to run [in London]," Bolt told a news conference.

Crystal Palace organisers had hoped to stage a three-way showdown between Bolt and his sprint rivals Asafa Powell and Tyson Gay.

Athletes competing in the UK are liable for a 50% tax rate on their appearance fee as well as a proportion of their total worldwide earnings - which for Bolt, who earns millions from endorsements, could be hugely costly.

HM Revenue & Customs won a case in 2006 brought by tennis star Andre Agassi. It successfully argued that as well as the prize money he accrued, a proportion of Agassi's worldwide sponsorship income was also earned during his time in the UK and was therefore taxable.

HMRC bases its tax charge on the number of UK events athletes compete in. For example, if Bolt were to take part in 10 meetings worldwide, with one in the UK, the HMRC could tax him on one-10th of his worldwide earnings.

The UK's tax laws have proved a handicap to the country's chances of hosting events. Uefa admitted in 2008 that Wembley missed out on the 2010 Champions League final for that very reason.

The Government has since agreed to waive the rule so London can host the 2011 final, and competitors in the 2012 Olympics are also exempt.

Golfer Sergio Garcia has admitted in the past that he limits his appearances in the UK because of tax laws."

http://news.bbc.co.uk/sport1/hi/athletics/8812123.stm