Have you noticed that many top tennis players reside in Monte Carlo? The reason is simple – Monaco is a tax haven.
The prize money that players make from tournaments is taxed in the country in which the money is earned. So there is no way to avoid taxes on prize money.
But the money that players make from endorsements is taxed based on their country of residence. That’s where the Monaco residency helps. Top players, who make a bulk of their money from endorsements can save millions of dollars every year by choosing to live in Monaco.
Another factor is that Monte Carlo is located closer to many tournament locations in Europe. So it makes travel easier. It also has good tennis facilities for practice.
Players such as Novak Djokovic, Daniil Medvedev, Stefanos Tsitsipas, Matteo Berrettini, and Grigor Dimitrov reside in Monte Carlo. These players frequently attract backlash in their home countries because they avoid paying taxes there.
Monaco has no taxes for citizens from all countries except France. So it’s not surprising that French tennis players such as Gael Monfils and Jo-Wilfried Tsonga avoid Monaco and instead live in the French-speaking part of Switzerland.
Monaco is not the only option for tennis players looking to avoid taxes. Dubai is another tax haven that has attracted top players. Russian Karen Khachanov, Frenchman Lucas Pouille, and Croatian Borna Coric live in Dubai. Australians Nick Kyrgios Alex de Minaur and Canadian Denis Shapovalov reside in the Bahamas, another tax haven.
Tennis players travel most of the year. They rarely stay in the country they call home for tax purposes but choosing the right country of residence saves them up to 45% in taxes compared to their home countries.