Tennis, news: Athletes living in tax havens, Nick Kyrgios, Alex de Minaur residences in The Bahamas, Monaco
It’s a common sight for tennis fans watching the introductions at the start of a Grand Slam.
The graphic pops up on screen. “Wow, look how much money he’s made over his career,” you think.
And then there it is again. Residence: Nassau, The Bahamas.
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While we’re sure athletes really do love living on a Caribbean island, there’s another big reason to live somewhere like The Bahamas – their back pockets.
The tropical nation is one of the many classified as a tax haven, or more technically an Offshore Financial Centre (OFC).
The International Monetary Fund (IMF) lists 26 nations as an OFC. Those include Panama (home to the Panama Papers, which leaked excruciating details from over 200,000 offshore financial accounts), a large number of Caribbean nations and the French principality of Monaco.
What do these countries have in common? Either incredibly low, or non-existent, income tax rates.
The Bahamas has become a hotspot for Australian tennis talent, with Lleyton Hewitt moving across the globe near the end of his playing career.
Asked why he moved there in an interview with Singapore‘s Straits Times back in 2015, Hewitt argued the location – an hour’s flight from the US, and with a seven-hour direct flight to London – was important, as well as the lifestyle and climate.
But the fact that The Bahamas does not force its residents to pay tax can’t hurt.
Tennis players travel for most of the year, but they need to pick somewhere to officially reside for tax purposes. And there’s a reason they’re all flocking to certain places.
A Foxsports.com.au analysis found that 20 of the world’s top 32 male tennis players either live in a traditional tax haven or have a residence with a notably lower tax rate than their home country.
That includes both Alex de Minaur and Nick Kyrgios. De Minaur’s listed residence with the ATP is New Providence – the most populous island in The Bahamas – while Kyrgios’ is Nassau, the capital.
You might ask why this matters. After all, none of these players are doing anything illegal. They do have the right to maximise how much money they make.
But these players’ home countries are losing out on millions in tax revenue because of it. It’s the same as corporations avoiding paying tax in the countries they do business in, just on a smaller scale.
The IMF has estimated multinationals save $US500 billion a year by shifting their tax burden to these havens; that’s money that goes into their pockets rather than helping pay for schools, roads, hospitals and everything else taxes pay for.
Tennis players aren’t taking quite so much money out of the coffers of their home countries, but the same principle applies.
Notably, the three Spanish players in the top 32 all remain loyal to their home countries, including Rafael Nadal.
The 19-time Grand Slam champion contributes honestly to the Spanish economy, paying 45 per cent income tax by keeping the island of Mallorca as his residence.
“In terms of managing assets, perhaps it would be better to go to another country with more beneficial conditions, but Spain is where I’m happy, with my family and friends,” Nadal said in 2017.
“In another country, I would have double the money but be only half as happy. Money doesn’t buy happiness.”
Our analysis found 10 players, and five of the current ATP top eight, reside in glitzy Monaco. These include Novak Djokovic, Daniil Medvedev, Stefanos Tsitsipas, Alexander Zverev and Matteo Berrettini.
While Monte Carlo is certainly beautiful, and the weather in the south of France has its appeal, there’s no coincidence that superstar athletes across multiple sports have been moving there for decades. It does not tax the income of foreign residents.
If you’re French, you can’t avoid taxes by moving to Monaco; France taxes its citizens who move to the principality.
But there’s another option – Switzerland, which also shares a language and border with France.
France’s top income tax rate is 45 per cent. Switzerland generally taxes citizens at a similar rate but it depends on the region, or ‘canton’. Some cantons tax residents based on living expenses, rather than their full income; a lesser figure.
Dubai has also become popular given its status as an aviation hub, but one that doesn’t levy income tax. Three of the ATP top 32 – Karen Khachanov, Lucas Pouille and Borna Coric – reside in the United Arab Emirates’ largest city.
Japan’s Kei Nishikori doesn’t live in a classic tax haven, but has moved from his home country (top tax rate: 55.945 per cent) to the US state of Florida. The top tax rate in the US is 37 per cent but the states can also take income tax, and Florida takes none.
Specifically, Nishikori lives in Bradenton, Florida, which is home to the famous IMG Academy sports complex and boarding school. Nishikori studied there as a teenager.
RESIDENCES OF THE ATP’S TOP 32 PLAYERS (Rankings as of January 2020)
1. Rafael Nadal: Home (Manacor, Mallorca, Spain)
2. Novak Djokovic: Monte Carlo, Monaco
3. Roger Federer: Home (Switzerland)
4.Dominic Thiem: Home (Austria)
5. Daniil Medvedev: Monte Carlo, Monaco
6. Stefanos Tsitsipas: Monte Carlo, Monaco
7. Alexander Zverev: Monte Carlo, Monaco
8. Matteo Berrettini: Monte Carlo, Monaco
9. Gael Monfils: Switzerland
10. Roberto Bautista Agut: Home (Castellon De La Plana, Spain)
11. David Goffin: Monte Carlo, Monaco
12. Fabio Fognini: Home (Italy)
13. Diego Schwartzman: Home (Buenos Aires, Argentina)
14. Denis Shapovalov: Nassau, Bahamas
15. Stan Wawrinka: Monte Carlo, Monaco
16. Kei Nishikori: Bradenton, Florida, USA
17. Karen Khachanov: Dubai, UAE
18. Alex de Minaur: New Providence, Bahamas
19. John Isner: Home (USA)
20. Grigor Dimitrov: Monte Carlo, Monaco
21. Felix Auger-Aliassime: Monte Carlo, Monaco
22. Lucas Pouille: Dubai, UAE
23. Andrey Rublev: Home (Moscow, Russia)
24. Benoit Paire: Geneva, Switzerland
25. Guido Pella: Home (Argentina)
26. Nikoloz Basilashvili: Home (Tbilisi, Georgia)
27. Pablo Carreno Busta: Home (Spain)
28. Borna Coric: Dubai, UAE
29. Nick Kyrgios: Nassau, Bahamas
30. Jo-Wilfried Tsonga: Gingins, Switzerland
31. Taylor Fritz: Home (California, USA)
32. Milos Raonic: Monte Carlo, Monaco
Top 32 residences breakdown
The Bahamas: 3
Other: 1 (Kei Nishikori – Florida)