In the glamorous world of professional tennis, there’s a special place where the world’s wealthiest players seek refuge from hefty taxes. It’s Monaco, a tiny paradise where you don’t have to worry about paying a lot of taxes on your money. Novak Djokovic, one of the highest-paid tennis players globally, has chosen to live there.

However, as Djokovic tries to win his 24th major title at the 2023 U.S. Open, there’s an important fact to remember: even though he lives in a fancy house in Monaco, he can’t avoid paying taxes to the IRS in the United States.

Novak Djokovic’s monaco oasis

Speaking of Monaco, let’s talk about Djokovic’s fancy house in Monaco. While the details of the value of the house aren’t very public, we do know that it’s on a hill with a view of the Mediterranean Sea, which is a tough experience to beat.

Moreover, Djokovic has the advantage of the Monte Carlo Masters right at his doorstep.

In his words, “It is a club I know very well. Quite a few top players reside in Monaco and use this club as a training base. The club transforms incredibly during the weeks of the tournament, but it is a great feeling to sleep in your own bed.”

Indeed, the tennis superstar still calls Monaco his home, even as he navigates the complex world of international taxation.

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In the end, even though Monaco is great for athletes who want to save on taxes, they can’t escape the IRS when they make money in the United States.

Monaco, The tax haven temptation for wealthy athletes like Novak Djokovic

Monaco is often called a “tax haven,” which appeals to rich athletes. They love it not just because of the nice weather but also because they don’t have to pay many taxes there. Dr. Andreas Bosse, an international laws expert who lives in Monaco, says that many athletes go there for these big tax benefits.

But when it sounds too good to be true…it probably is. Monaco’s tax perks don’t cover everything, as Bosse explains. Athletes who play in different countries still have to follow a rule called “income sourcing.” This means they have to pay taxes in the places where they earn money. So, if Djokovic wins the U.S. Open and takes home $3 million, he doesn’t have to give any of it to Monaco’s government. However, when it comes to the U.S. tax authorities, Uncle Sam won’t be so lenient.

Jerry August, another international tax expert, stated, “A fundamental principle of both U.S. and international taxation is that a jurisdiction has the right to always tax you on your labor if your labor is performed in that country.” So, even if Djokovic lives in Monaco, when he earns money in the U.S. through his tennis, the big American tax man, the IRS, will want some of it.

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