John Tavares Entangled in Legal Battle With Canadian Government Over Millions

Published February 7, 2024 at 9:18

When John Tavares inked a deal with his beloved Toronto Maple Leafs, it was a dream come true. The contract, at the time, marked the richest in Maple Leafs franchise history, laden with hefty signing bonuses.

However, those very signing bonuses have landed Tavares in hot water with the Canadian revenue agency. Today, news emerged that Tavares is embroiled in a legal dispute over an $8 million tax bill imposed by the Canadian government. The disagreement revolves around a signing bonus exceeding $15 million received by Tavares.

Maple Leafs captain John Tavares is battling the Canada Revenue Agency over an $8M tax bill.

Tavares argues he should owe 15% on a US$15.3M signing bonus he received when he joined Toronto in 2018. The CRA contends the bonus should be taxed at 38%.

Tavares' legal team has lodged a dispute, asserting that the 15% tax rate is accurate, while the CRA insists on a 38% levy. As of now, the CRA has yet to respond to Tavares' legal team, leaving the matter unresolved.

With the salary cap in effect, Toronto has leveraged sizable signing bonuses to navigate challenges. However, this ruling could hamper the team's ability to lure certain free agents if players are subject to the 40% tax rate on signing bonuses, eroding Toronto's competitive advantage.

Complicating matters further is the tax advantage enjoyed by some American-based teams in their respective markets. This case has the potential to establish a significant precedent moving forward.

Source: Bladeofsteel
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