Toronto Maple Leafs captain John Tavares has become accustomed to intense confrontations during his hockey career, but the one he is about to engage in away from the ice could have a significant impact on his future.
As the newspaper reported on Wednesday The Globe and Mail, number 91 appealed last week the verdict of the Tax Court of Canada regarding the payment it must make to the Canada Revenue Agency. This claims that the attacker should pay taxes equivalent to 38% (plus interest) of the value of his signing bonus of US$15.3 million accepted under the terms of his contract from 1er July 2018; relying on a Canadian-American tax treaty, the player believes instead that the payment should be around 15%.
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Tavares signed a seven-year, $77 million pact with the Leafs after leaving the New York Islanders, so more than $8 million is at stake in the dispute. According to the player, the bonus was paid into a bank account he held in New York in July 2018, adding that he spent only 45 days in Canada from September to December of that year.
“The bonus was a form of recognition for Tavares, a uniquely talented free agent who signed a seven-year contract with the Maple Leafs. […] It was not a question of salary, any benefits or other remuneration for his work,” it was clarified in the appeal request, as specified by the specialized media.
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Tax rate… imposing
He added that the outcome of the conflict could influence number 91 – and other National League skaters – when the time comes to choose a team on the free agent market. The veteran will be free as the air at the end of the next campaign, unless he extends his agreement. If he bites the dust against the Revenue Agency, he risks being tempted to look elsewhere, just like other athletes. In 2016, the federal government increased the current maximum tax rate from 29% to 33%.
This season, the 33-year-old Ontarian has collected 37 points in 48 games.