Despite being one of the richest tennis players of all time, Rafael Nadal is a long way from catching up with Roger Federer. The Swiss icon is by far the wealthiest athlete in this sport. A few years ago, the Spaniard spoke about what prevented him from getting close to the numero uno position.
Nadal chose to remain in Spain, in a familiar environment with close ones. The Iberian country has one of the harshest tax laws on the continent. High-earning athletes are taxed about half of their income and Nadal is no exception. He revealed, 10 years ago, that he gives away a whopping 56% of his prize winnings as tax (via Sydney Morning Herald).
Speaking at a sponsor event in 2017, Nadal admitted staying in Spain was not beneficial financially (via The Statesman). However, he remains in his home country because that is where he is happy with his family and friends.
“In terms of managing assets, perhaps it would be better to go to another country with more beneficial conditions, but Spain is where I’m happy, with my family and friends.”
The former World No.1 conceded that he would be twice as rich if he shifted to a tax-friendly country but said he would not be as happy as he is now.
“In another country, I would have double the money but be only half as happy. Money doesn’t buy happiness.”
Tax havens like Monte Carlo (Monaco), the United Arab Emirates, and the Bahamas are favorites among high net worth (HNI) individuals. Most tennis stars, including Novak Djokovic, Daniil Medvedev, and Alexander Zverev, reside in Monte Carlo and pay zero income tax. But even then, Nadal’s biggest rival, Djokovic for instance, is not richer than him despite also having many endorsements, investments, business ventures and other possessions to his name. This shows that it is not just taxes that are a deterrent for a tennis player or sportsperson not being rich, there are other ways of earning and maintaining money as well.
Like Nadal, Federer also preferred to stay back in his home country. However, Swiss taxation is much more lenient than in Spain, capped at 30%. His current city of residence, Wollerau, has one of the lowest basic tax rates in Europe, only 11.56%. Between that and the national cap, Federer is estimated to have paid only $7 million in taxes in 2023. This has been a major factor in contributing to him zooming ahead of Nadal in net worth.
When Rafael Nadal withdrew from an event because of heavy tax
In 2011, Rafael Nadal took a stand against harsh taxation and spoke out against British tax laws. The United Kingdom imposes a global tax on athletes that ply their trade on British grounds. This means if Nadal plays a tournament in the UK at any point in a season, he is liable to pay a part of his annual earnings as tax, even including all events he played outside the UK.
This applies to every athlete who competes in the country regardless of nationality and the law has faced backlash from the likes of Usain Bolt and Tiger Woods. This is in addition to a 50 per cent tax put on players’ appearance fees, winnings and endorsements.
This led Nadal to pull out of the 2012 Queen’s Club Championships. He chose to play the Halle Open in tax-friendly Germany to warm up for the Wimbledon. He slammed the tax law as the one negative aspect of playing in London, while praising the crowd and the stadiums. Nadal had said since the Wimbledon and the ATP Finals will also be held in the UK, he will end up paying a lot of tax. Hence, he pulled out of the Queen’s Club tournament (via Tennis.com).
Despite such heavy taxation, Nadal’s net worth is a cool $323.61 million, as of February 2023. He has earned $134,640,719 in prize money throughout his career. Returning to the tour in 2024, this sum will only go up. However, he trails Federer by a considerable distance. The 20-time Grand Slam champion’s career prize money count of $130,594,339 is lower than the Spaniard’s, but his net worth is an incredible $550 million. Even after his retirement, his brand value and endorsements make him the highest-earning tennis athlete.
