"15%? While I get taxed like 40?" - NHL fans react as Maple Leafs' John Tavares gets into trouble with Canada tax agency over an $8M bill

Toronto Maple Leafs captain John Tavares found himself entangled in a legal dispute with the Canada Revenue Agency (CRA) over an $8 million tax bill.

The controversy stemmed from a US$15.3 million signing bonus Tavares received upon joining the Maple Leafs in 2018. Reporter Rick Westhead tweeted:

"Maple Leafs captain John Tavares is fighting the Canada Revenue Agency over an $8M tax bill. Tavares says he should owe 15% on a US$15.3M signing bonus he received when he signed with Toronto in 2018. The CRA says the bonus should be taxed at 38%."

As news of the tax dispute reached social media platforms, fans wasted no time in expressing their opinions. One fan, clearly taken aback by the discrepancy in tax rates, exclaimed:

"15%???? While I get taxed like 40%?????"

Another fan weighed in on the broader implications of the issue:

"And they wonder why players sign in Florida and Texas. I have no problem with a tax but there needs to be tax parity to have an equal playing field for every team. Hopefully the next CBA addresses this."

Meanwhile, a third fan said:

"I'm just a regular dude and each additional dollar I earn gets taxed at 53%. I'm not even totally sure how he would get away with only paying 38%."

A detailed look at John Tavares's tax issue

Toronto Maple Leafs captain John Tavares is embroiled in a legal battle with the Canada Revenue Agency (CRA) over an $8 million tax bill, stemming from a signing bonus received in 2018. Tavares contested the CRA's assessment, arguing that the bonus should be taxed at 15%, as per a Canada-U.S. taxation treaty.

The outcome of the dispute could impact Canadian professional sports teams' ability to sign top players, with implications for tax parity across the league. Tavares' appeal to the Tax Court of Canada asserts that the bonus was an inducement, not employment income, and thus subject to the lower tax rate.

Tavares' decision to join the Leafs, despite higher tax rates in Canada, was influenced by the signing bonus. The CRA's reassessment claims Tavares owes an additional $6.8 million in taxes and $1.2 million in interest, based on unreported income.

Tavares argued that the bonus, paid into his U.S. bank account, should be taxed at the U.S. rate. The outcome of the case could impact future contracts and tax considerations for professional athletes playing in Canada.