Agassi loses out to taxman [Archive] - MensTennisForums.com

Agassi loses out to taxman

TheBoiledEgg
03-17-2004, 06:10 PM
Agassi loses out to taxman



Former world number one Andre Agassi has lost his battle over paying taxes to Britain's Inland Revenue on Wednesday, in a ruling that could have a significant effect on the tax liability of all international sportsmen and women who compete in British events.


A judge at London's High Court rejected the American's challenge over paying 27,520 pounds ($49,790) in tax for payments from sportswear giants Nike and Head, even though neither he nor they have a tax presence in Britain.

Justice Lightman ruled the tax was due for the 1998 to 1999 tax year, which runs from April to April, because the former world number one comes to Britain for a limited number of days a year for tournaments such as Wimbledon.

The payments Agassi received from Nike and Head, who provide his clothing and rackets, derived, at least in part, from playing in those tournaments.

The Inland Revenue said income tax of 27,520 pounds should be paid, based mainly on income calculations of 23,750 pounds from Head Sports AG and 102,158 pounds from Nike Inc during the tax year 1998 to 1999.

The 33-year-old argued that he could not be assessed in over payments made by Nike and Head because he has no tax presence in Britain.

"It is common ground that section 556 of the 1988 (Income and Corporation Taxes) Act subjects non-residents to tax, if the payment is made by an English company or a foreign company with a tax presence here," said Justice Lightman on Wednesday.

"The question raised is whether they are intended to be excused from liability if, instead, they are paid by a foreign company with no tax presence here.

"In my judgment it would be absurd to attribute to the legislature the intention that liability could in any and all cases be avoided by the simple expedient of channeling the payment through a foreign company with no tax presence here.

"If this were the case, the tax would effectively become voluntary. As it seems to me, the plain and obvious intention of the legislature was to impose an obligation on the person making the payment irrespective of his tax presence here."

Agassi has won 58 titles, including eight grand slams, and amassed $28 million in prize money during his career. He won his first grand slam at Wimbledon in 1992.

http://www.eurosport.com/home/pages/V3/L0/S57/E6190/sport_Lng0_Spo57_Evt6190_Sto562190.shtml

Reuters - & JB - 17/03/2004

Scotso
03-17-2004, 06:17 PM
I don't see why you should be taxed by a country you're just in for a few days, but at the same time, Agassi is worth millions and shouldn't be complaining over a bit of loose change.

Lee
03-17-2004, 09:04 PM
It doesn't matter how much the amount or how rich Agassi is, it's crazy for Britian to tax people like that.

shaoyu
03-17-2004, 09:48 PM
Does it mean all prize money from Wimbledon should be subject to British taxes?! How about this judge gives Sampras a call!

MisterQ
03-17-2004, 09:52 PM
I sense another Boston Tea Party coming on... ;)

Lee
03-17-2004, 10:21 PM
I sense another Boston Tea Party coming on... ;)

:haha:

shaoyu
03-17-2004, 10:28 PM
I cannot believe this judge's logic, I think it is even more absurd than taxing Wimbledon prize money, at least in that case you can claim the Lawn Tennis Club has tax presence in Britain. So a foreign company sponsored you to play at Wimbledon? Pay us taxes.

"The payments Agassi received from Nike and Head, who provide his clothing and rackets, derived, at least in part, from playing in those tournaments."

Now here is the part of more fun: 'at least in part'
So Serena your $50 million deal with Nike is, at least in part, to support you play at Wimbledon, now would you please kindly give us 40% of it for taxes!!!

shaoyu
03-18-2004, 12:21 AM
I just found out that players were already paying taxes for prize money. Poor Sampras! I guess it's OK for US players as the tax is for either US or Britain, so they still pay the same total tax (US IRS gives tax credit to foreign tax charged on income earned abroad). So if Britain feels too envious giving foreign players prize money without charging taxes I guess it is still understandable.

However charging taxes on endorsement money earned abroad is a bit too greedy. Then most every country can claim some part so double taxation (or triple, quadruple, infiniple for that matter) may not be avoided. How do you determine how much part of the endorsement deal is connected to Britain? I think it is basically arbitrary. Some says the payments he receives during his stay in Britain, but I see a similar argument to Judge Lightman's: "In my judgment it would be absurd to attribute to the legislature the intention that liability could in any and all cases be avoided by channelling the payment through a foreign company with no tax presence here, or by making payment when the player is not in the country."

So by all means charge 40% on all endorsement earning of a player just because they play Wimbledon. I doubt this is an easy case with US IRS as from their view this endorsement money is mostly income earned in US, so a foreign tax credit is questionable. Then let Australian and France follow suit, then I am sure Serena will play even less grand slams! Welcome to the era of prize-money-only tennis!

star
03-18-2004, 05:11 AM
hmmmmmm

Wonder how many players will find a new aversion to grass.... :)

Sanneriet
03-18-2004, 09:36 PM
This could easily end up costing highly endorsed athletes like Serena Williams, Agassi, Hewitt, and Roddick to LOSE money by playing in England. Apparently it also has tax implications for the companies paying endorsement money to the athletes, and does not apply to athletes in team sports.

jrm
03-18-2004, 10:23 PM
peanuts for him

tennischick
03-19-2004, 12:07 PM
it's not him that's the issue. besides i'm sure the sponsors will pick up the tab. it's the IMPLICATION of the ruling that matters, not whether Agassi can afford to pay the fine. sheesh.

Experimentee
03-19-2004, 02:30 PM
It seems really stupid that someone can be taxed in a country where they only visit 2-3 weeks a year. Brits seem desperate for cash :rolleyes:

the cat
03-19-2004, 03:02 PM
Well said, Experimentee. This is ridiculous! I'm sure there are real tax cheaters in England who the authorities should be going after and not a visiting tennis player who spends a couple weeks a year in England.