ultimately signed a $77-million deal<\/a>, of which just over $15 million was a signing bonus, he said.<\/p>\nTavares paid taxes to the U.S. on the signing bonus, at 15 per cent, the court heard, when he was still in New York and he and the team considered the payment an inducement, according to a Canada-U.S. tax treaty.<\/p>\n
But in 2022, the CRA reassessed the hockey player\u2019s tax filing and claimed he owed $6.85 million in tax, plus $1.2 million in interest.<\/p>\n
The CRA said that the $15 million payment was paid out over several years and also came with strings attached, making it more like employment income, which would be taxed at a higher rate in Canada.<\/p>\n
\u201cWhat\u2019s behind this case is how you treat the signing bonus\u2014is it normal wages, or is it something distinct and different?\u201d Tavares\u2019s lawyer, Justin Kutyan, said.<\/p>\n
In court, Tavares recounted the negotiations behind the deal in detail, saying that as his contract was up with the New York Islanders, he was approached by several teams, including San Jose, Toronto, and Las Vegas.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/08\/F6VKNRZNL5COLO2AQCL3SBQQNQ.jpg\")
John Tavares This court sketch shows John Tavares testifying in a federal tax courtroom on Tuesday, Aug. 18, 2026. <\/p>\n
Kyle Dubas, Toronto\u2019s general manager at the time, sent him a text message just one minute after he was eligible to speak to other teams.<\/p>\n
Tavares described one key consideration, which was the contract\u2019s annual average value, and his \u201cline in the sand\u201d was the equivalent of $11 million a year.<\/p>\n
\u201cIf you really want me, why can\u2019t we agree on $11 million?\u201d Tavares said, recounting what he said directly to Dubas in a call.<\/p>\n
Dubas responded, if you take a seven-year contract at $11 million a year, you\u2019re a Toronto Maple Leaf, Tavares said.<\/p>\n
He responded, \u201cYes.\u201d<\/p>\n
Among the reasons he wanted that $11 million a year in a signing bonus was because such payments are protected in ways employment income isn\u2019t, Tavares testified.<\/p>\n
\u201cMuch of that is in a signing bonus, so it can\u2019t be bought out, and it\u2019s protected during a lockout,\u201d Tavares said.<\/p>\n
\u201cYou try to protect yourself from the unpredictability of life and sport. So as I experienced throughout the contract, we did end up having a lockout, a pandemic happened, I sustained a major injury. The importance of protecting the value of the earnings of that contract was really important to me,\u201d he said.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/08\/ZABX6MDTUBGD7DB3G2552IMBBQ.jpg\")
John Tavares Toronto Maple Leafs player John Tavares speaks to reporters outside a federal tax courtroom on Tuesday, Aug. 18, 2026. (Jon Woodward) <\/p>\n
The impact of this decision will be felt on Canadian teams, said accountant and tax planner Kim Moody.<\/p>\n
\u201cFuture players, if they look at this court decision that falls in favour of the CRA, they\u2019ll take a look at this and say, \u2018Yeah, I don\u2019t think so. I\u2019ll sign with a United States team.\u2019 So that\u2019s a real challenge,\u201d he said.<\/p>\n
\u201cWill this have impacts that are negative against Canadian teams? I think the answer to that is, for sure, it will.\u201d<\/p>\n
Despite the millions on the line in his and possibly future contracts, Tavares didn\u2019t give any sign of stress, even joking with reporters in the hallway.<\/p>\n
\u201cI\u2019d rather be at my cottage,\u201d he said with a smile.<\/p>\n
Related Stories<\/p>\n","protected":false},"excerpt":{"rendered":"Toronto Maple Leafs star player John Tavares took the stand in a tax court case today over his…\n","protected":false},"author":2,"featured_media":863152,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[712,49,48,82],"class_list":["post-863151","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sports","tag-apple-news","tag-ca","tag-canada","tag-sports"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/863151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=863151"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/863151\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/863152"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=863151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=863151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=863151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/08\/7ZIFOABI5FEYBO6YOJ3UD6BF7E.jpg\")
John Tavares Toronto Maple Leafs player John Tavares speaks to reporters at a federal tax court on Tuesday, Aug. 18, 2026. (Jon Woodward) <\/p>\n