Quote:
Originally Posted by kipperiggy
Canadian tax system is based on residency.
I do not know the intricacies of the tax treaty between the two countries but on a surface level if Tavares is a Canadian citizen not residing in Canada more than ~180 days then he would be taxed on that income in the US, so taxing him again on the same earnings in Canada would be double taxation of the same income, which is the whole point of the treaty.
Point being, if he loses and has to pay CRA then what happens to the taxes he already paid the IRS?
Oh Locke where art thou? I am but a measly auditor who took tax 10+ years ago...
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Oh dude...do you really want to know?
I kind of stayed out of it because there are so many moving pieces involved here and I have little to no concrete information.
Generally speaking, yes, in America you have to pay tax in every jurisdiction in which you earn income.
Yes, he paid 15% on his signing bonus and, I believe you're allowed to do that...in America.
In Canada however those regulations were changed where your employer had to withhold significantly more, but that applied to normal bonuses, etc. I cant speak to NHL signing bonuses but assume they operate similarly.
The thing is...he was likely a Canadian Resident when the Bonus was paid and ergo is subject to Canadian Taxation regulations despite being paid by an American company.
Like it or not.