PARIS — Carlos Alcaraz’s historic French Open victory has been overshadowed by a financial setback, as the Spanish tennis prodigy faces double taxation on his £2.1 million prize money. The 21-year-old, who claimed his first Roland Garros title earlier this month, will see a significant portion of his earnings taxed twice—first in France and again in Spain.
The Double Taxation Dilemma
Alcaraz’s winnings from the French Open fall under France’s "impôt sur le revenu" (income tax), which imposes a 45% levy on prize money for non-resident athletes. However, Spain’s tax authorities will also claim a share, as the country taxes its residents on worldwide income. This dual liability could reduce Alcaraz’s £2.1 million payout by nearly half.
A tax expert familiar with international sports earnings explained: "France withholds nearly half upfront, and Spain will tax the remainder at its progressive rates, which can reach up to 47% for high earners. Unless Alcaraz can claim relief under the France-Spain tax treaty, he’s looking at a brutal financial hit."
How Double Taxation Affects Athletes
Alcaraz isn’t the first athlete to face this issue. Tennis stars like Rafael Nadal and Novak Djokovic have navigated similar challenges, often relying on tax treaties or residency adjustments to mitigate losses. Key factors influencing double taxation include:
- Residency status: Non-resident athletes often face higher withholding taxes in host countries.
- Tax treaties: Bilateral agreements can prevent dual taxation, but not all apply to prize money.
- Local laws: Some nations, like the UK, exempt sports prizes from income tax.
Alcaraz’s team has remained tight-lipped about potential strategies to reduce the burden. However, sources suggest they may explore:
- Claiming treaty benefits to offset French taxes against Spanish liabilities.
- Structuring earnings through a corporate entity in a lower-tax jurisdiction.
- Deferring income to a future tax year with lower rates.
A Precedent: Nadal’s Tax Battles
Rafael Nadal’s 2012 French Open winnings sparked a similar controversy when Spain’s tax agency pursued back taxes. The 22-time Grand Slam champion eventually settled, but the case highlighted the complexities of cross-border earnings. "Athletes need proactive planning—waiting until after the fact is a recipe for disaster," noted a Madrid-based sports accountant.
The Broader Impact on Tennis
The issue extends beyond Alcaraz. Players from high-tax nations (e.g., Scandinavia, Germany) routinely lose 50-60% of prize money in events like Roland Garros. By contrast, American players benefit from the Foreign Earned Income Exclusion, shielding up to $120,000 from U.S. taxes.
ATP Player Council member Vasek Pospisil recently criticized the system: "It’s absurd that a player can win a major and take home less than a semifinalist from a tax-friendly country. The tours need to address this inequity."
What’s Next for Alcaraz?
With Wimbledon looming, Alcaraz’s focus remains on the court. But his financial team faces urgent work. Spain’s 2024 tax reforms offer limited relief—the top rate dropped from 52% to 47%, but deductions for foreign taxes remain restrictive.
A spokesperson for the French Tennis Federation (FFT) declined to comment on individual cases but stated: "Tax policies are set by national governments. The FFT ensures all prize money is distributed in compliance with French law."
Conclusion: A Costly Victory
Alcaraz’s triumph at Roland Garros cements his status as tennis’ next superstar. Yet the double taxation ordeal underscores the hidden costs of global sports success. As one agent quipped: "Winning a major is priceless—until the tax bill arrives."