Player Discussion How overpaid is Tavares

[Gary Nylund]

It's not just Buffalo and Detroit. The entire Atlantic division is far worse this season. Florida is about to lose again tonight.

Sigh....Skinner.

You really need to stop saying shit like this.

 

[meefer]

I would expect that Tavares' court case re: taxation rates, will have some impact on the discussions.

Tavares’ Tax Battle: The Crux of the Dispute

In July 2018, John Tavares signed a lucrative seven-year, $77 million contract with the Maple Leafs, which included a hefty $15.3 million signing bonus. Tavares’ legal team argues that due to his U.S. residency at the time of signing—stemming from his nine-year tenure with the New York Islanders—his bonus should be taxed at only 15% under the Canada-U.S. Tax Treaty. However, the CRA contends that the bonus is not truly a bonus but regular income, subject to a higher tax rate exceeding 50%, due to attached conditions such as repayment if Tavares retired early.
(from CPA4IT website)

15% to 50% would certainly dent the old savings account.

 

[Gary Nylund]

I would expect that Tavares' court case re: taxation rates, will have some impact on the discussions.

Tavares’ Tax Battle: The Crux of the Dispute

In July 2018, John Tavares signed a lucrative seven-year, $77 million contract with the Maple Leafs, which included a hefty $15.3 million signing bonus. Tavares’ legal team argues that due to his U.S. residency at the time of signing—stemming from his nine-year tenure with the New York Islanders—his bonus should be taxed at only 15% under the Canada-U.S. Tax Treaty. However, the CRA contends that the bonus is not truly a bonus but regular income, subject to a higher tax rate exceeding 50%, due to attached conditions such as repayment if Tavares retired early.
(from CPA4IT website)

15% to 50% would certainly dent the old savings account.

Yeah this is not good news. And at first blush, it seems that the CRA has a valid point.

 

[WillyC]

Yeah this is not good news. And at first blush, it seems that the CRA has a valid point.

How does the CRA determine a signing bonus paid while JT is living in New York… is not a signing bonus?

 

[Gary Nylund]

How does the CRA determine a signing bonus paid while JT is living in New York… is not a signing bonus?

This is what caught my eye - "attached conditions such as repayment if Tavares retired early." That doesn't sound like a bonus to me.

That's me though and to be clear, I'm not a tax expert by any means so my opinion of course means nothing.

 

[WillyC]

This is what caught my eye - "attached conditions such as repayment if Tavares retired early." That doesn't sound like a bonus to me.

That's me though and to be clear, I'm not a tax expert by any means so my opinion of course means nothing.

IMO, still a bonus… John, we’ll give you a 15 million dollar bonus if you move back to Canada next season and sign a 7 year deal with Toronto.

If you don’t fulfill the whole 7 years and retire early… ya gotta pay back the bonus we gave you in New York.

The CRA is grasping like the greedy pricks they are.

 

[Gary Nylund]

IMO, still a bonus… John, we’ll give you a 15 million dollar bonus if you move back to Canada next season and sign a 7 year deal with Toronto.

If you don’t fulfill the whole 7 years and retire early… ya gotta pay back the bonus we gave you in New York.

The CRA is grasping like the greedy pricks they are.

I hope you're right, but it seems fishy to me. I believe it was announced as a signing bonus, he can't "unsign" so if they can ask for the money back, that indicates that it wasn't a signing bonus and if they're calling the bonus something that it isn't, that makes it seem like they're trying to get away with something.