Do you know that the little city-state of Monte Carlo, which is bordered by France on three sides and the Mediterranean Sea on one, doesn’t give taxation any thought? Non-citizens are not taxed on their income either. Why do tennis players live in Monte Carlo, though?
Tennis players pick Monte Carlo as their home since there is no income tax there. That explains why so many famous athletes make Monte Carlo their home. However, because the majority of tennis players travel year-round, they only register in Monte Carlo.
They aren’t in Monte Carlo either during the off-season. They return to their actual house with their families rather. Therefore, it is safe to assume that the majority of players simply reside in Monte Carlo for its financial advantages.
Why Do Tennis Players Live In Monte Carlo?
Tennis competitions and commercial sponsorships are two ways that professional tennis players get millions of dollars. Taxes in most nations result in a sizable reduction in income. Due to this, a number of players reside in nations where they can profit from certain tax advantages.
Fans were curious as to why so many tennis players live in Monaco and Monte Carlo following their semifinal game at the 2022 Australian Open between Daniil Medvedev and Stefanos Tsitsipas.
Rich people and celebrities have always been drawn to Monte Carlo because of its beauty and elegance. Fans recently inquired as the 2022 Australian Open semifinal was taking place about the appeal of Monaco for tennis players especially.
Stefanos Tsitsipas and Daniil Medvedev both reside in Monte Carlo. There are a few other well-known individuals who live there as well. Here are a few justifications.
Monte Carlo: Tax Heaven
Since there are no individual income tax charges for inhabitants, Monte Carlo has been regarded as a haven since 1869. Because most professional tennis players are on the road all year long, they spend significantly less time in Monte Carlo than the required six months.
Even though Monaco has relatively low-income taxes in comparison to other countries, living there is known to be very expensive. One is for certain: the principality once had the most expensive property market in the world.
The participants, on either end, exploit this to their advantage to make huge investments and avoid paying taxes. However, if you compare the incomes of professional tennis players, a $4 million expenditure on a home isn’t that significant.
ATP Players at Monte Carlo
Life at Monte Carlo
The primary benefit of living in Monte Carlo for the tennis player is the absence of income tax. There are numerous other benefits to residing in Monte Carlo. Even just traveling to Monte Carlo is breathtakingly nestled between the French and Italian Rivieras on the Mediterranean coast.
It is one of the most stunning spots on earth, with its turquoise blue waters complementing the terrain and the majestic mountains serving as a backdrop. Additionally, Monte Carlo enjoys an incredible climate with over 300 days of sunshine annually.
The summer is extremely long and sunny, while the winter is relatively brief and pleasant. Although Monte Carlo may get very hot in the summer, this is seldom a problem because most of the opulent residences are just close to the sea or have a swimming pool.
One of the most expensive and opulent real estate may be found in Monte Carlo. For those with the means, Monte Carlo is one of the nicest places in the world to live because of the real estate, which is breathtakingly gorgeous and offers breathtaking views.
Tennis Players Save Money Living In Monte Carlo
David Goffin is one of the tennis players who reside in Monte Carlo. Even though the prize money for professional tennis tournaments tends to vary greatly, the average for winning an ATP tournament is roughly $2 million.
If you are a devoted tennis viewer, you undoubtedly know that tennis players are extremely wealthy because of the money they have earned through various tennis tournaments. David Goffin travels to the French Open and wins the competition, earning approximately $2 million in prize money.
David Goffin is from Belgium, and if he chooses to reside there, he will be subject to a remarkably high tax rate of approximately 35% of those €2 million, amounting to $700,000 in taxes on the prize money that he received.
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To avoid losing nearly half of his prize money, he rather relocated to Monte Carlo and settled down there. Because there is no personal income tax in Monte Carlo, he can stop paying taxes by doing that.
He will finally be able to keep all of his winnings to himself without having to give up nearly half of them. As you can see, he saved $700,000 in just one championship by relocating to Monte Carlo.
Let’s now examine David Goffin’s overall earnings during his career. Over his career, he has earned $15 million in prize money. He would have paid about $5.2 million in taxes if he had filed taxes in his native Belgium.
Considering that, he would have saved that $5.2 million if he had been in Monte Carlo for all of those competitions.
Why doesn’t Roger Federer reside in Monaco?
Did you observe that the name of the well-known tennis star Roger Federer is absent from the list of tennis players who live in Monte Carlo above? He is one of the few elite athletes that stayed in their own countries rather than relocating to Monaco.
He lives in Switzerland with his family. Additionally, as we previously discussed, several players choose to reside in Monaco specifically for the lack of tax incentives. Additionally, players who do not reside in Monte Carlo must pay a 20% tax on the millions of euros in prize money they receive.
However, Roger believes that:
“He remained in Switzerland and made honest tax payments. He claims that he treated his country fairly”
He has worked hard to advance to the position of Swiss representative while remaining in his native country. The fact that he remained in his nation despite everything is also a testament to his patriotism! He started to promote travel. He made do on his own.
How much money has Novak Djokovic saved on taxes on average?
If we take Novak Djokovic as an example, he resides in Monte Carlo. He would have been required to pay taxes on about 20% of his income if he had been a citizen of Serbia. Djokovic earned a whopping $143 million in prize money, $29 million of which he would have paid in taxes.
Because of this, Djokovic saved that $29 million by remaining in Monte Carlo. However, this only accounts for his prize money; in addition, the Serbian has saved a sizable sum thanks to sponsorship and endorsement deals worth millions.
Not only is Monte Carlo a haven from taxes, but it is also unquestionably a haven from tennis. Many tennis players reside in Monte Carlo and in particular with one of the biggest and most prestigious ATP championships worldwide.
The Rolex-sponsored Monte Carlo Masters. The tennis court in the center of Monte Carlo, which is seen in the photo, is unquestionably the best-located tennis court in the entire world.
The only tournament on the whole ATP Tour where players do not have a part of the program to play is the Monte Carlo Masters, an ATP 1000 Tour Masters event. However, the majority of tennis players still come here to play.
Many athletes are competing at Monte Carlo to hone their skills before the French Open, which is often held one month later. The tournament is played on clay. Rafael Nadal has conquered the Monte Carlo Masters, winning the championship 11 times in his career, much like he did in many other clay tournaments.
Most recently, in 2019, Fabio Fogini unexpectedly defeated Rafael Nadal to triumph in the tournament, being the first Italian to do so in 60 years.
Most individuals come to the notion that players simply reside here to maximize their financial gain. Since having 0% income tax is the easiest and best way to save money, however, when you consider Monte Carlo’s location, I can’t think of a better place to call home.
Numerous rich people reside in Monte Carlo, which also serves as the corporate headquarters for numerous businesses. The stock market contributes significantly to the size of the population. Tennis players will therefore have a lot of distractions nearby, which is fantastic for practice, business, and training.
Monaco is a nation that depends entirely on tourism and other industries to survive. Monaco’s primary source of income comes from corporations that arrange events rather than from ordinary taxation.
The solution is intricate. Many professional tennis players will not be required to pay taxes because it is believed that they have a good chance of reaching the top 20 and remaining there for at least two years. Professional tennis players who have to pay taxes on their winnings and endorsements do so in the country where they received those funds.