Globe-Trotting Sportsman Or Entertainer: US

A US citizen with extensive, international, multi-sourced income probably has the worst of all tax worlds. If non-resident in the US, he is unlikely to be able to claim the earned income deduction available to employed expats, and will find himself paying withholding tax in a number of countries which cannot in many cases be reclaimed or set off against US taxation because of the absence of a tax treaty.

Such an individual will almost certainly resort to corporate structures to market his or her skills and manage derivative income flows. It may well be that these can usefully be based in offshore jurisdictions, although complex structures may be necessary if the Controlled Foreign Corporation legislation is to be avoided.

Apart from the extra difficulty of minimising tax on the income side, a US sportsman or entertainer will be in the same position as any other US citizen, and the remarks under 'High-Tax Country Resident' will apply.

If a foreign sportsman or entertainer becomes US resident, then he or she is in the same position as an expatriate executive.

Such individuals who have significant 'active' business income may be able to make use of offshore corporate tax shelters, although the foreign sales corporation (proscribed by the WTO) has now been abolished.

www.lowtax.net contains details of the offshore business sectors of 35 jurisdictions, and their taxation.

NB: The suggestions given above do not constitute investment advice. They are intended only to assist individuals in finding appropriate professional advice, which is essential for anyone planning offshore investment.