Ajournment for Leafs' John Tavares with Canadian tax court: Report
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As John Tavares contemplates how much of a hometown discount is appropriate for the Maple Leafs in his next contract, he might have preserved some extra millions through the courts.
The Hockey News reports his lengthy tax appeal fight with the Canada Revenue Agency has been adjourned, possibly to remain dormant.
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Ajournment for Leafs' John Tavares with Canadian tax court: Report Back to video
In dispute is a $15.25-million US signing bonus as part of his massive, seven-year, $77-million free-agent deal with Toronto back in 2018 that has just expired.
The CRA contended the bonus should be treated as salary and taxed at 50%, close to $8 million Canadian. Tavares’ representatives counter that it qualifies for a preferential 15% rate under the Canada-U.S. Tax Treaty, a deal covering income earned by non-residents providing services in Canada.
Such cases, when adjourned, usually are not pursued by the government. Postmedia’s request for comment from Tavares’ agent, Pat Brisson, was not immediately returned.
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Last week, THN reported the tax court ordered the CRA to disclose key internal records and notes related to its reassessment after initially denying to answer questions from the appellant about how the findings in his audit and comparables were used. The CRA had cited privacy concerns about releasing the data.
A spokesperson for the CRA later e-mailed Postmedia to clarify the adjournment related to a procedural matter involving document production, not the case overall, and that “the appeal remains active and ongoing.”
The case is closely being watched by Canada’s pro sports teams hoping to lure more stars north to the seven NHL franchises, as well as the Toronto Blue Jays and Raptors.
The CRA has been unsuccessful in similar proceedings against the contracts of one-time Jays Josh Donaldson and Russell Martin, but is appealing.
Tavares, who wants to stay a Leaf and was nearly at point-a-game production this past season at age 34, is expected to get somewhere between $4 million and $5 million per year on his next contract.
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