CRA appeals former Blue Jays multi-million-dollar court win.
The Canada Revenue Agency has filed an appeal on former Toronto Blue Jays Josh Donaldson and Russell Martin's court win in multi-million-dollar tax battle. CRA says Tax Court judge made multiple errors by siding with former Blue Jays in recent decision excluding millions of dollars from their taxable incomes.
The CRA is crying foul over the fact the judge ruled that both American players' retirement contributions - made through a form of pension plan called a Retirement Compensation Agreement (RCA) - should be deducted only from the Canadian portion (40 per cent) of their income while they played for the Toronto Blue Jays.
In an appeal filed with the Federal Court of Appeal Tuesday, the CRA's lawyers say Justice Jean-Marc Gagnon made numerous errors of law and fact when he ruled that the two star players' taxable income was millions less than what CRA calculated.
The CRA argued unsuccessfully that the retirement contributions should be deducted before the 60/40 American-Canadian split was calculated.
For example, the taxable portion in Canada of Martin's US$20-million salary in 2017 was US$7 million in CRA's view, but US$5.5 million in the players' view.
Last month, Gagnon found that CRA's interpretation was «faulty» for many reasons.
In its appeal to the Federal Court of Appeal, CRA says that Gagnon's failure to recognize that RCA contributions should be deducted before the country split is a mistake in law and fact.
The agency also disagreed with the judge's finding that the RCA contributions were based solely on work done by each player in Canada.
RCAs are commonly used by high-earning athletes and top executives recruited by Canadian organizations.
They are one of a few tools used by Canadian sports teams to attract talent from countries with lower income.
When an RCA holder retires or loses their job, the pension account will begin paying out, at which point the money will be taxed, presumably when they are in a lower tax bracket. The CRA will then also refund the 50-per-cent portion of all contributions that it withheld.
SOURCE: National Post
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JANVIER 10 | 100 ANSWERS CRA appeals former Blue Jays multi-million-dollar court win. Is the CRA correct in their appeal to get millions of dollars in tax revenue from former Blue Jays Josh Donaldson and Russell Martin? | ||
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| No | 65 | 65 % |
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