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Rafa Nadal & Taxes

10/13/2011Rafaholics ™



There are several discussions going around on Twitter over the recent comments Rafa Nadal has made over the new Tax hike in the UK. Rafa is the Vice-President of the players council which in my opinion gives him the right & authority to comment on these type of players issues. Rafa has always been the one to stand up for things he believes in & I've always admired him  as for being the one that stands out for his style of play & his views on things.. This is one of them..

Matt Cronin
has a few interesting informative tweets on the tax issue & I would hope everyone would take their time to read them..

2 be fair to Nadal & complaints of high UK taxes here's my figures: Nadal earns $21 million dollars in endorsement income annually so if...
...he plays in UK f1 month a year tax on his endorsements would be $1.7 million annually. In his last 3 tournaments in UK he earned...
... $2.24 million dollars, taxed at 50% means he paid another $1.12 million 4 total of $2.82 million in taxes that he pays to British...
... govt annually. Given his after tax prize money i UK comes to only $1.12 million could be argued that he is taking a substantial loss.
That is a whole lot of unfair money loss..

Quote:



SHANGHAI (Reuters) – London risks losing the showcase end-of-season ATP World Tour Finals because of the high rate of tax, world number one Rafael Nadal said at the Shanghai Masters on Thursday.
The Spaniard believes the 50 percent tax on players’ appearance fees, winnings and a proportion of their worldwide endorsement earnings could see the glamour event featuring the top eight men being staged elsewhere unless the law is changed.
“It is really tough what is happening today in the UK with the tax. There are a lot of things that are really positive. This (tax) thing is probably really negative,” he said after losing in the third round to German Florian Mayer.
“What I believe in my heart, is that London is a fantastic event. There’s a full crowd at every match, a fantastic stadium. But London is not the only city in the world,” he said.
The five-year contract for the ATP World Tour Finals, staged at the 02 Arena, comes up for renewal in 2013 but Nadal indicated that growing discontent could see players pushing for the event to be moved to a more favourable tax environment.

“The tax regime from UK is complicating a lot of things because to go and play at Queen’s, the problem is not to win. The problem is I can lose money because I go there.
“I play for one week, and they take out money from my sponsors. That’s a lot,” he said of the Wimbledon warm-up event he has decided to skip next year in favour of playing at Halle.
“I’m going play at Wimbledon. I’m going to play in the World Tour Finals. So that is a lot of weeks, a lot of tax. It is becoming more and more complicated to play in the UK at the moment,” he said.
TAX CHANGE

However, a change to the tax regime could help London renew its contract for the ATP finals, added the Spaniard.
“So (if there is a tax) change, the chances of keeping the World Tour Finals in London are going to be very, very high,” he said.
Nadal dismissed suggestions in the British media that he had decided to play the Halle event in Germany instead of Queen’s because he had been offered a higher appearance fee.
“For the last four years, I have played at Queen’s. So we thought it is the right moment to change. I am not changing because Halle is paying me more money than Queen’s. That’s not the reason,” he said.
Wimbledon chief executive Ian Ritchie called on the government earlier this year to change the tax laws or risk Britain losing some of tennis’s marquee events.
Government rules state that sportsmen and women competing or even just practising in the UK are taxed a proportion of their income from endorsements and sponsorships even if those deals have nothing to do with Britain.
The rules are the reason triple Olympic champion sprinter Usain Bolt has stayed away from the London Diamond League meetings and there are also fears they could affect some of the country’s smaller golf tournaments.


Rafael Nadal defends himself against accusations of cheque-chasing
Neil Harman,Tennis Correspondent, Shanghai
October 13 2011 12:01AM


The Government’s tax on the “passive income” of individual sports stars was always going to drive the best abroad. It is that, more than any money that Rafael Nadal will receive for rejecting London next June for a tournament in Germany, that has persuaded him to commit to play at least two years on foreign grass before Wimbledon.

When he came off court having reached the third round of the Shanghai Rolex Masters yesterday, the world No 2 from Spain had been warned that a groundswell was building on the internet that accused him of grasping a big pay cheque courtesy of a German millionaire rather than playing on grass courts he admits to loving.
In any other circumstances, Nadal would have been returning to the AEGON Championships at Queen’s Club again in eight months’ time. He has played there every year since 2005, missing out only in 2009 because of the tendinitis problems that forced him to abandon his Wimbledon defence. Indeed, his experience of playing the Gerry Weber Open in Halle six years ago was a first-round defeat, hardly a happy memory.

“I like to play in all the tournaments where they really want me,” he told The Times. “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 [in that time] I really wanted to play in Queen’s.

“The truth is, in the UK you have a big regime of tax, it’s not about the money for playing, it’s not a problem of that. They [Revenue & Customs] take from the sponsors, from Babolat, from Nike and from my watches [he is sponsored by Richard Mille]. This is very difficult. I am playing in the UK and losing money. I did a lot for the last four years, but it is more and more difficult to play in the UK. It is too much.”

He is reminded that one headline suggested that he is going to Germany for the sake of a guaranteed windfall just to show his face. “That’s not the truth,” he said. “The problem is easy to understand. I’m probably getting a bigger guarantee from Queen’s than for playing in Halle but I am losing a lot more money from sponsors.”

Nobody would surely expect a sportsman to come to Britain and accept losing money. Only by reaching the final next year could Nadal be guaranteed to break even. Although he does not say it publicly, there are clearly concerns that if this situation continues, doubts are genuine over the prospect of extending the present deal for the O2 arena in southeast London to host the season-ending Barclays ATP World Tour Finals that runs until 2015.

There are sensitive negotiations going on behind the scenes to try to obviate the demands of the taxman — indeed, Nadal and others had been led to believe that they may have been reaching a successful conclusion — but time is of the essence. He has to let the tournaments know as far in advance as possible where he is going to play and, much to the chagrin of those who pack Queen’s to the rafters to catch a sight of him, it is Germany.

The punitive elements of the law came to light when Andre Agassi, the former world No 1 and Wimbledon champion, discovered that any payments made in connection with activities carried out by a non-resident in the UK as a sportsman are subject to the deduction of UK income tax at source, where the payments are made by foreign companies to a foreign company controlled by him.

Agassi played in tournaments in Britain for a limited number of days and, using a foreign company that he set up and controlled, entered into sponsorship contracts with two non-resident manufacturers of sports and clothing equipment — Nike and Head — and received payments through his company derived (at least in part) from playing in those tournaments.

As a result of monies paid, HMRC assessed him for £27,520 of extra tax in 1998-99. Agassi appealed, but lost in the Special Commissioners and the High Court. In 2004, Agassi went to the Court of Appeal and won. HMRC appealed to the House of Lords, which voted in its favour.

Exceptions can be made case by case. There is a blanket income-tax exemption for all overseas athletes competing in the Olympics next year. The London Organising Committee of the Olympic Games is also exempt from corporation tax and the International Olympic Committee is exempt from income tax and capital gains tax.

All this, combined with the desire to offer something back to his German fans, has driven Nadal into foreign arms. “I respect Halle and one day I want to play Queen’s again,” he said.

Whether he does is a matter for others to answer. 

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