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Tax Battles Over Tavares's $15.3M Bonus Could Shake Up His Future In Toronto And Canadian Sports Signings

Tax Battles Over Tavares's $15.3M Bonus Could Shake Up His Future In Toronto And Canadian Sports Signings

BY TYLER BALL    FEBRUARY 7, 2024  (9:29)
Today news about a battle over money potentially owed to John Tavares has thrown his future with the Toronto Maple Leafs into a blender. This dispute could end his time in Canada and make signing free agents much more difficult for Canadian teams.

Tavares Battling With Canadian Government Over Missing Bonus Money



John Tavares is one of if not the biggest free agent signings in Toronto Maple Leafs history. As such Tavares was given a nice healthy bonus of 15.3 million dollars at the time. Many years later this bonus money has become a problem for Tavares and the Maple Leafs.

A new appeal has been placed by Tavares in the Canadian court system. In the appeal, Tavares claims that on his bonus he should have only been taxed at around 15%.


Tavares argues the bonus should have been taxed at only 15 per cent under a provision of a Canada-U.S. taxation treaty, which sets the lower tax rate for «inducements,» such as signing bonuses, paid to athletes, artists, actors and musicians.

The Canadian government claims that Tavares does not qualify for this and instead owes a 38% rate in taxes.

The CRA assessed that he must pay a rate of over 38-per-cent on the bonus, plus interest, but it has not yet filed a response to the appeal. None of the allegations have been proven in court.

These allegations will now have to be heard by a Canadian court and Tavares will need to win his appeal to get the lower tax rate. If he doesn't this wouldn't only be a big shift for Tavares's future but the future of all athletes in Canada.

Taxes Becoming A Major Roadblock For Canadian Sports Teams



With this ruling the Canadian government could make it significantly less attractive to sign in Canada as a sports star.

The tax rate going from 15 to 38 percent alone would cause some players to reconsider their future. This becomes especially true when U.S. states such as Texas and Florida have no state income tax.

If this ruling does not go Tavares's way Canadian fans should be concerned about what the sports landscape could look like. Stars could hear of this and take all Canadian cities off their destination list.

As the case progresses and new information is available we will pass it along to you.

As Read On - National Post - Leafs captain John Tavares fighting Canada's tax agency over $8M it claims he owes
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