The Leafs captain John Tavares could end up paying $8M in massive legal battle

Julien Trekker
May 29, 2024  (10:43)

Toronto Maple Leafs captain John Tavares during a press conference.
Photo credit: Screenshot

A new development states that the Toronto Maple Leafs' captain John Tavares could end up paying $8M to the Canadian Government in a massive legal battle.

The Canada Revenue Agency is disputing Tavares' claim that the $15.25 million USD bonus he received from the Leafs in 2018 should be taxed at a lower rate. Tavares asserts that this bonus was taxed as salary revenue, but it should have been considered like other athlete bonuses, which are taxed at 15%. If Tavares loses this case, he could be forced to pay an additional $8 million to the Canadian government in taxes.
A new report from City News states hat the CRA is denying the fact that the payment was a signing bonus and insists Tavares should pay taxes on the entire amount as regular income.
"The CRA 'denies that any amount referred to as a "signing bonus" was a signing bonus or an inducement payment,' the government said in a response to Tavares' tax appeal, filed last week in the Tax Court of Canada.

It adds, 'the amount of USD $70,890,000 was not paid to [Tavares] as consideration for entering into, or as an inducement to sign, the Contract.'

'The 2018 Amount was salary, wages or other remuneration received by [Tavares] in the 2018 taxation year when he was a resident of Canada,' the response to the appeal says. 'Accordingly, the entire 2018 Amount is to be included in [his] income.'
The outcome of this legal dispute could have significant financial implications for Tavares. Despite earning around $95,141,463 in his NHL career, an $8 million difference is substantial and worth fighting for.
Tavares still hopes to have the bonus reclassified, which would significantly reduce his tax burden.
Do you think the Toronto Maple Leafs should compensate John Tavares if he ends up paying $8M in his massive legal battle?