Toronto Maple Leafs forward and captain carrying a puck up ice against the Detroit Red Wings.
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Toronto Maple Leafs Captain Facing An $8M Legal Battle

Published February 7, 2024 at 10:08

Recently it was announced that Toronto Maple Leafs captain John Tavares will be facing a difficult legal battle in the coming months. The legal dispute revolves around a bonus paid to him by the Maple Leafs.

Tavares Faces Major Legal Battle Over Bonus Money

Reports are confirming that John Tavares is going up against the Canadian government in a legal battle over money owed to him. The dispute comes from a 15.3 million dollar bonus paid to Tavares by the Maple Leafs.

An appeal filed by Tavares indicates that he was overtaxed on the bonus paid to him. Tavares believes he should have only been taxed at a 15% rate.

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.

Instead, Tavares was taxed at a 38% rate which he is now trying to get overturned by the government.

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.

If Tavares loses this appeal it could affect all other Canadian markets as well in their contract negotiations.

Tavares Dispute Could Put Canadian Markets At A Major Disadvantage

This dispute between John Tavares and the Canadian government could send a ripple effect through Canadian professional sports. If Tavares loses Canadian markets could be at a major disadvantage.

If athletes are taxed at a higher rate on their bonuses it would make bonus money less attractive in contract negotiations. This would lead Canadian teams to need to make higher offers in salary. This then leaves them less cap space overall.

If Tavares does end up losing his appeal it will be wild to see how that impacts the rest of the contracts signed in Canada by athletes.

As Read On - National Post - Leafs captain John Tavares fighting Canada's tax agency over $8M it claims he owes
February 7   |   348 answers
Toronto Maple Leafs Captain Facing An $8M Legal Battle

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