john tavares cra taxes

John Tavares in legal battle with the CRA over his contract with the Leafs

Toronto Maple Leafs captain John Tavares is in a legal battle with the Canadian Revenue Agency, according to a recent report.

As per an article by Glen McGregor published in the National Post on Wednesday, Tavares is fighting with the national tax service over his contract signed with the Leafs back in 2018, with the CRA claiming he owes an additional C$8 million in taxes.

One of the highest-profile free agents in league history, Tavares signed a seven-year, US$77 million deal with Toronto.

The first overall pick in the 2009 NHL draft, Tavares spent the first nine seasons of his career with the New York Islanders, before the Oakville native opted to come to his home province and childhood team.

Tavares' contract included a heavy signing bonus of US$15.25 million in the first year of his contract, 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.

As per McGregor, the CRA believes that Tavares owes C$6.8 million in taxes, as well as C$1.2 million in arrears. However, Tavares believes he should only be taxed 15 per cent on that bonus, compared to the 38 per cent rate the CRA is seeking, and has reportedly filed an appeal through his lawyers.

Tavares argues 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 "inducements" set for athletes, artists, actors and musicians, as per McGregor.

McGregor added that the CRA has not yet responded to Tavares' appeal.

Tavares is not the first big-name Toronto athlete to have tax issues — former Blue Jays stars Jose Bautista, Josh Donaldson, and Russell Martin were all reportedly in a legal battle with the CRA in 2023.

Lead photo by

Dan Hamilton-USA TODAY Sports

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