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Old 11-29-2006, 09:12 PM   #46
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Default Re: Are prize money subject to tax?

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Originally Posted by Lee View Post
Never heard about this term when I was filing my tax forms. What exactly is this?

Is it about the added value of the house you live? Like you bought the house for $100,000 and sold it for $200,000?
Well, for a house, the $100,000 appreciation is one kind of capital gain. The VAT like a sales tax, but it isn't paid by the purchaser as a sales tax is. Here's a link if you want a clearer explanation that I can provide. It's prevalent in Europe.

http://en.wikipedia.org/wiki/Value_added_tax
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Old 11-29-2006, 09:14 PM   #47
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Default Re: Are prize money subject to tax?

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Originally Posted by Socket View Post
The US is one of a small number of countries that taxes on the basis of citizenship, rather than residency. So all US citizens are required to file federal tax returns even if they live and work abroad full-time (as my brother does, in France). Because the US and France have a tax treaty which governs the payment of taxes by both countries' nationals, my brother's French tax payments are credited against the US tax he would otherwise owe on his income. So, he does not pay twice on his income.

In many other counties, the system is residency-based, not citizenship-based, so if you reside full time in a country where there is no (or lower) income tax, you are not liable to the country where you are a citizen for any tax on income earned outside of your home country. This is why you get what are called "tax exiles." (Ingmar Bergman is a famous Swedish tax exile, who lived abroad to avoid paying what he called was a 90% marginal tax rate.) Pat Rafter was an Australian tax exile who took advantage of the lower/non-existent tax rates on Bermuda. As a Bermuda resident, he only paid Australian taxes on income he earned in Australia, and not on income he earned in other countries. This would not be the case for US citizens, who would be liable for US taxes (some of which would get a credit) for all income earned both at home and abroad.

Yes, this will be on the test.
Very informative. Thank you VERY much.
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Old 11-29-2006, 09:20 PM   #48
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Default Re: Are prize money subject to tax?

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Originally Posted by Socket View Post
Well, for a house, the $100,000 appreciation is one kind of capital gain. The VAT like a sales tax, but it isn't paid by the purchaser as a sales tax is. Here's a link if you want a clearer explanation that I can provide. It's prevalent in Europe.

http://en.wikipedia.org/wiki/Value_added_tax
OK! As it mentioned in the link, it's called GST in Canada. It's 6% across the country for buying a donut in a donut shop (but not when you buy half a dozen) to having a haircut. It's reduced from 7% since the introduction. In the eastern (smaller) provinces like PEI, New Brunswick, etc., it's called HST (a combination of GST and provincial taxes) to cut down the amount of paper work.

But if you're non-residence in Canada, you can fill in a form upon your leave from Canada to have the taxes refunded (including your hotel room and purchases you haven't consumed in Canada) if it's over certain amount. I can't remember how much.
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Old 11-29-2006, 09:29 PM   #49
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Default Re: Are prize money subject to tax?

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Originally Posted by cmurray View Post
Actually, it was said twice in this post. And both posts came while I was typing my question, so I didn't see that it had already been addressed. My post took a while because my children were trying to kill each other and I had to intervene.

But hey...thanks for being grumpy and intolerant! That always makes for a pleasant online experience!
it was asked like 10 times by more people, nothing personal...
Just an FYI for everyone else...
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Old 11-30-2006, 01:15 AM   #50
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Default Re: Are prize money subject to tax?

Players don't get to keep their prizemoney anymore.
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Old 01-09-2013, 01:56 PM   #51
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Default Re: Are prize money subject to tax?

Very important is also double-taxing issue. Hrbaty spoke about prize money on tour few years ago. Here are some words :

"After winning tournament, player is holding check for example for 100 000 $. Number of players' accounts are kept in ATP central and tournament sends money directly to ATP central. ATP sends money to players on Monday after final. By Wednesday, they are there. Of course, after tax."

"So basically if I won a tournament in Dubai and had a prize money 100k, I would get 100k on my account because in Dubai is 0% tax from winning. But I would have to pay 19% income tax in Slovakia so I won 81 000 netto after all". (my comment : in Slovakia is now 25% income tax for income higher than 34 000 Euros)

"But there are some more issues. If I won a tournament in Australia, where tax is 48%, I would have only 52 000. And if Australia doesn't have a deal with Slovakia about double-taxing the same thing, I would pay another 19% in Slovakia (now 25%) so I would have only about 42 000 (now 38 000 !)."

He is talking about more things : "Quality coaches cost from 50 000 to 70 000 per annum. Topstar coaches may cost from 500k to million p.a."



By the way, Hrbaty has residence in Monte Carlo, not in Slovakia - but principle is what I am writing about. From 100 000 you would have only 38 000 - and there are surely countries, where you'd have even less.

Now I don't know if Federer has a residence in Switzerland, but he lives in Dubai, so probably in UAE.
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Old 01-09-2013, 02:45 PM   #52
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Default Re: Are prize money subject to tax?

If a country you play in and earn prizemoney has tax rules you pay on site tax which is usually taken from your prizemoney. I don't know about other countries but the UK has a allowance of I think it is £500 before tax for sports prizemoney.

Players then pay the home taxes of whatever country they live in. Many players have Monaco as their residence because I believe the rule is you must spend 2 weeks a year there to class it as your official residence and can then claim the tax benefits of living there.
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