Never happening, Point would take home more cash in Tampa not paying taxes at 7 mill a year than in Quebec at 10.6. You'd have to hit like 14 per year

Never happening, Point would take home more cash in Tampa not paying taxes at 7 mill a year than in Quebec at 10.6. You'd have to hit like 14 per year

Actually this came up with Aho. If he remains a Florida resident he pays less tax in Montreal

i know. cause u can claim your bonuses on any location in north america.

Well that's not entirely accurate, you need to be considered a resident of said location so you need to actually have ties there. Easier said than done, but it is possible.

yeah. some player purchase small apartments or register at a friends house to claim bonus. the athletic wrote a wicked article explaining this process, just this last week

Yeah, registering at a friends house doesn't sound enough (I work in tax law, I'm not just guessing lol) . Do you have the link to the article? I thought I read it but I don't remember the examples you mentioned.

https://theathletic.com/1050270/2019/06/27/yes-quebec-has-high-taxes-but-heres-how-the-canadiens-can-level-the-playing-field/ this shoudl help. i believe brain wilde wrote an article a few weeks back. i cant seem to find it. but i read that one of the reasons duchene bought some property in nashville (he put it on air bnb) was so he could claim his bonuses there.

Thanks. This article does not say that... Also, after digging a little bit, it sounds like Duchene bought this place for investment purposes (and next to his buddy's) , plus he always loved Nashville. Buying property and not living there is not enough to be considered a US resident and benefit from the reduced rate on signing bonuses.

But wouldn't someone like Point or Aho apply since they lived there for a few years?

Thanks. This article does not say that... Also, after digging a little bit, it sounds like Duchene bought this place for investment purposes (and next to his buddy's) , plus he always loved Nashville. Buying property and not living there is not enough to be considered a US resident and benefit from the reduced rate on signing bonuses.

oh. i must be wrong then. could you explian how players would avoid higher taxes from bonuses? like i know bonuses can be claimed anywhere in north america under some nafta agreement, but salaries cant

Sure, it's a bit more complicated than that but I'll brush the rough picture.

It's not under nafta, it's because of a tax treaty between the US and Canada. The purpose is to avoid double taxation when some income would be taxable in both the US and Canada. Let's take Matthews for example. He's a US citizen which makes him liable to pay tax in the US on what he's earning from the Maple Leafs (in Canada). What the tax treaty does is limit to 15% the right of, in this example, Canada to tax Matthew's signing bonuses. Let's say his tax rate in Arizona is 40% but it will take into account the amounts paid in Canada so that overall Matthews' bonus is taxed at 40% (15% in Canada, 25% in the US). The idea is that overall, the US resident that is getting a bonus in Canada will pay the same amount of tax that he would pay if it was earned in the US.

Matthews therefore pays 40% on his SB instead of 53% as is the rate in Ontario. A 13% saving on 55M in SB is an extra 7M for Matthews.

so how do european players (like aho) playing in a canadian market, save on taxes. you can use a differnet player if need be. btw im a finance major, and i have to take some tax courses next year, so i just wanna get a basic picture of this

Yes they would. But if they didn't get a green card and cut all ties to the US when they move to Canada, they would most likely only benefit from the US resident status for the first year signing bonus. Still, it would be a 14% saving (for Point) on the first year SB, which would save him over 1M , so not too bad.

Aho could have gotten savings in two ways: one the SB (he is deemed US resident for tax purposes - the 183 days rule) and two the RCA (explained and the article you linked me earlier - look at the Nemeth example, it's pretty much exactly what I would have planned for Aho, except he would have gotten bigger savings with the huge SB and the length of the contract giving the opportunity to take advantage of the RCA).

Do in case of Aho, he gets paid almost 50% of the contract in SB in 12months. Does all of that get charged at the lower rate?

Thanks for answering all the questions on taxation!