Tavares fighting Canadian tax authority over $8m from $15.3m signing bonus

[Legion34]

Over a 100 million in career earnings, I’m sure he can sop away 6-7 million into an RCA for one year.

He did move back then, like he did at the end of each season.

Claiming residency and “moving” you have no idea if that’s true.

His legal filings say completely different

RCA are a ridiculous suggestion. If I have them. Tavares shouldn’t.

It’s just and rrsp contribution. He isn’t going to retire at 65 and trickle out money to stay in a lower tax bracket.

You do understand that’s how it works right?
You defer the tax now. Then you get taxed at a “hopefully” lower tax bracket.

Unless. Tavares is planning on living on less than 150k a year it’s just silly

 

[TMLBlueandWhite]

So why is Tavares the only one of the four that has this problem.

They all got very similar deals. Nearly identical. But the other three mega-rich mega-millionaires don't have the CRA hounding them for money.

Sounds like a Tavares problem more than anything

 

[Golden_Jet]

So why is Tavares the only one of the four that has this problem.

They all got very similar deals. Nearly identical. But the other three mega-rich mega-millionaires don't have the CRA hounding them for money.

Sounds like a Tavares problem more than anything

Only Tavares and Matthew’s lived in the States, a large portion of their 10 million+ signing bonus can be taxed at a 15% rate, which is huge for them. Must spend 1/2 the year plus 1 day in the states to qualify, and principal residency in the states.

So JT issue is likely over the 1/2 year rule, as he signed on July 1 with Toronto. The beef is with that first year signing bonus. All the subsequent years he wouldn’t qualify for the 15% tax rate on the signing bonus. That’s my take on the reason.

 

[DuklaNation]

We don't know the details. My first question is why has this become public?

 

[Voight]

So why is Tavares the only one of the four that has this problem.

They all got very similar deals. Nearly identical. But the other three mega-rich mega-millionaires don't have the CRA hounding them for money.

Sounds like a Tavares problem more than anything

The other three didn't originally move to the Leafs from a US based team. I.e. they have spent their whole careers playing for the team.

 

[sawchuk1971]

John Tavares is taking the CRA to court. A ruling against him could change how NHL teams sign players

Toronto Maple Leafs forward John Tavares is taking the CRA to court over a dispute as to how a signing bonus from 2018 should be taxed. The ruling could have a chilling effect on how Canadian NHL franchises negotiate with unrestricted free agents.

www.ctvnews.ca

 

[Bjindaho]

We don't know the details. My first question is why has this become public?

It has become public because tax court cases are public.

We also do have quite a bit of the details. One big difference between Tavares and most players in situations like this is that he is a Canadian playing in Canada, he sold his residence in the US (there are articles surrounding this), and he moved back to Canada.

His lawyers are arguing that he is a non-resident because he spent less than 183 days in Canada, but he bought a house in Canada during the year (as a Canadian with limited ties to the US) making that an extremely difficult argument.

The 15% conversation is the argument that the entire sum was earned before he moved back (aka at the date of signing) versus the argument that the sum will be earned in Canada (because it is conditional, he had to actually report to Toronto to not have to pay it back, meaning that none of it was actually earned on Jul 1).

 

[DuklaNation]

It has become public because tax court cases are public.

We also do have quite a bit of the details. One big difference between Tavares and most players in situations like this is that he is a Canadian playing in Canada, he sold his residence in the US (there are articles surrounding this), and he moved back to Canada.

His lawyers are arguing that he is a non-resident because he spent less than 183 days in Canada, but he bought a house in Canada during the year (as a Canadian with limited ties to the US) making that an extremely difficult argument.

The 15% conversation is the argument that the entire sum was earned before he moved back (aka at the date of signing) versus the argument that the sum will be earned in Canada (because it is conditional, he had to actually report to Toronto to not have to pay it back, meaning that none of it was actually earned on Jul 1).

I'm aware of that. Still doesn't answer the question. No, we don't have enough details on it.

 

[Golden_Jet]

I'm aware of that. Still doesn't answer the question. No, we don't have enough details on it.

Agree, we have the overview, not the details.

 

[mouser]

It has become public because tax court cases are public.

We also do have quite a bit of the details. One big difference between Tavares and most players in situations like this is that he is a Canadian playing in Canada, he sold his residence in the US (there are articles surrounding this), and he moved back to Canada.

His lawyers are arguing that he is a non-resident because he spent less than 183 days in Canada, but he bought a house in Canada during the year (as a Canadian with limited ties to the US) making that an extremely difficult argument.

The 15% conversation is the argument that the entire sum was earned before he moved back (aka at the date of signing) versus the argument that the sum will be earned in Canada (because it is conditional, he had to actually report to Toronto to not have to pay it back, meaning that none of it was actually earned on Jul 1).

From my limited reading of the Canadian tax code residency section, this seems like a very problematic detail for Tavares to overcome and claim non-residence for that tax year.