Boxing Champion Chooses China Over The States, Saves Millions
Boxing champion Manny Pacquiao saved millions of dollars this weekend by choosing to fight American boxer Chris Algieri in China instead of the United States.
Pacquiao won $23 million when he defeated Algieri Sunday, and thanks to much lower tax rates in both China and his home country of the Philippines than in the States, he’ll get to keep more than 60 percent of it, reported Forbes. Even if his earnings are taxed in China (12 percent) and the Philippines (20 percent), he’ll save more than $2 million, because the IRS could have taken up to 39.6 percent.
Pacquiao, who has won world championships in eight different weight classes, has frequented Las Vegas in the past for boxing matches. But his promoter, Bob Arum, told USA Today avoiding the IRS was a factor in his decision to fight in China Sunday. “We are talking millions of dollars he can save,” Arum said.
Forbes ranked Pacquiao as the 11th highest paid athlete in the world this year, with earnings of $41.8 million from June 2013 to June 2014, and more than $300 million in earnings overall. His high earnings make him an easy target for tax collectors, and he’s currently battling the IRS and the Philippines over alleged tax evasion.
The Philippines government wants the equivalent of about $75 million for taxes it says Pacquiao failed to pay in 2008 and 2009, and the IRS has put a federal tax lien of $18.3 million on all of his property and financial assets for taxes it says he failed to pay between 2006 and 2010, reported Forbes.
As a non-U.S. citizen, Pacquiao still has to pay U.S. taxes on money earned in the States. He claims he paid those taxes in 2008 and 2009, and the Philippines can’t also tax his U.S. income in those years because of a treaty between the two countries. Proving he paid those taxes could help his case in the Philippines, but might be difficult given his separate battle with the IRS.
Thanks to his Sunday fight location, he has between $2 and $5 million extra to deal with the outcomes of those battles.
Top 6 on BarbWire.com