Former major league baseball player Russell Martin is in danger of being fired by the Canada Revenue Agency (CRA), which is demanding dollars from him under various interpretations of a previous tax return.
According to what was reported by the daily newspaper National Post In a long article published Thursday, three former Toronto Blue Jays color carriers face the FA in court: In addition to Martin, Josh Donaldson and Jose Bautista must justify the numbers they provided to the TRA. In the case of the first two of them, they will present their arguments to court in July, and the dispute concerns more precisely the amounts that will be deducted from their total income, through contributions to the pension agreement.
Florida residents in the years 2015 to 2017, the years under review by the CRA, Martin and Donaldson earned $42 million and $28.65 million respectively over this period. They fell out with the government body about the time they spent outside of Canada: at the time, they said they were in the country 40% of the year mainly for “workdays.” According to the CRA, deductions had to be made before the time in question was counted, while players claim they had to be made after the fact.
In legal documents obtained by the newspaper, the defendants believe the CRA’s interpretation is contrary to the “structure, object, spirit and purpose” of the Income Tax Act, while denouncing double taxation. They add that contributions to a retirement compensation arrangement should only be deducted from the Canadian portion of income tax, because they remained in the United States for the rest of the year.
The upcoming ruling could represent an upward or downward impact of nearly $5 million on Martin’s declared tax, compared to Donaldson’s $2.58 million. If she can console them, they’re better off than Bautista, for whom the CRA refused $16 million in contributions paid over four years.
Incentive not to play in Canada?
The outcome of the case could affect many athletes based abroad. They would have little desire to make a living in Canada, in a country with a higher tax rate than others, according to the attorney defending Martin and Donaldson, Ms.H Marie France Dompierre.
“One of the problems that working athletes in North American sports leagues often face is that they have to deal with massive tax implications as employees. The stakes are high when it comes to most negotiations Canada-based teams have with their players who live in Canada,” she said in an article she wrote last year. Elsewhere The ability to defer taxes is often at the forefront of these discussions This could actually allow Canadian teams to attract talented athletes if tax rates were reduced to a level similar to those affecting club players in the United States.
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