Leafs captain Tavares still in CRA fight over up to $8 million: report
John Tavares’ season with the Toronto Maple Leafs might be long done, but he hasn’t stopped fighting.
Unfortunately for Tavares, those battles seem to be in the courtroom with the Canada Revenue Agency (CRA), in a case first publicized in February of this year based on what the federal department believes is a sum of around $8 million in unpaid taxes.
Tavares’ contract with the Leafs, signed back in July of 2018, remains one of the largest in league history: a seven-year contract worth $77 million, or $11 million annually.
Tavaresâ contract included a heavy signing bonus of US$15.25 million in the first year, with over US$70 million of his contract paid out in yearly bonuses, as per CapFriendly.
Big signing bonuses are a common tactic by the Leafs and other big-market teams to attract top free agents, as players typically prefer to receive more of their money upfront if the team can afford it.
But, according to a Sportsnet article published yesterday by Glen McGregor â who also broke the original story for the National Post â the CRA sent in a response filed last week in the Tax Court of Canada that disputes Tavares’ argument for paying a different tax rate.
Tavares had previously argued that since the money was deposited into his New York bank account in 2018, he was only in Toronto for less than 45 days during the year after signing, and the money should be set at the lower tax rate provision of a Canada-US taxation treaty designed for âinducementsâ set for athletes, artists, actors and musicians, as per McGregor.
The CRA âdenies that any amount referred to as a âsigning bonusâ was a signing bonus or an inducement payment,â as per McGregor, while adding âthe amount of US$70,890,000 was not paid to [Tavares] as consideration for entering into, or as an inducement to sign, the Contract.â
If he does not win the case, Tavares could owe the CRA up to $8 million. He is set to be a free agent after the 2024-25 season.
McGregor added that the Tax Court of Canada has “not yet scheduled a hearing in the dispute.”