Canadian NHL star in major legal battle with government over $8 million bill

The CRA claims Tavares owes over $8 million in taxes and interest linked to a signing bonus from nearly six years ago.

The core issue revolves around the tax rate applied to the signing bonus. Tavares argues for a lower 15% rate, while the CRA insists on a higher 38% rate. This dispute not only affects Tavares personally but also has implications for Canadian sports teams seeking top talent.

McGregor emphasizes the broader impact, suggesting the outcome could hinder Canadian teams' ability to offer competitive deals.

The government's decision to raise the top tax rate in 2016 has led to increased taxation on signing bonuses, posing recruitment challenges for teams.

For Tavares, the appeal's resolution may influence his future with the Maple Leafs. His current contract, ending after the upcoming season, relies heavily on bonuses rather than salary.

While beneficial for managing the salary cap, this structure faces scrutiny due to the tax issue.