As there is no NHL hockey to watch right now, the second best way to pass the time is to consider the interaction of hockey players and tax.\u00a0 Hockey players, and other professional athletes, have complicated tax lives.\u00a0 They often live in new countries, move frequently, and supply their services in a bewildering number of jurisdictions.\u00a0 Their tax returns look like telephone books.\u00a0 Such complication will inevitably lead to disputes, as three cases decided in the fall of 1999 show.<\/p>\n
First in time (and the only one involving an active NHL player) is Khabibulin v, The Queen<\/em>, 2000 DTC 1426.\u00a0 The issue was caused by – wait for it \u2013 a lockout!\u00a0 In 1994 Khabibulin was an unsigned prospect for the Winnipeg Jets (not the current Jets, but the ones that became the Phoenix Coyotes; and people complain that tax law is complicated).\u00a0 He lived in Belarus.\u00a0 Khabibulin signed a contract in August, attended training camp, and was then sent to Springfield in the AHL when the lockout commenced on October 1.\u00a0 His contract called for a signing bonus of $104,123, which he claimed was not taxable in Canada under the provisions of the Canada-USSR Income Tax Convention <\/em>(despite the fact the USSR no longer existed; this just gets better as it goes along).\u00a0 \u00a0Revenue Canada disagreed.\u00a0 Khabibulin appealed.\u00a0 The legal question was whether the signing bonus was paid for signing the contract (and thus taxable) or for playing hockey (and thus exempt). \u00a0Justice Bowie decided that all the components of Khabibulin\u2019s contract were paid for playing hockey, despite the components being divided into categories for \u201csigning bonus\u201d and \u201csalary\u201d.\u00a0 Therefore, Khabibulin was not required to pay Canadian tax on the signing bonus.<\/p>\n The next case was Pavel Bure v. The Queen<\/em>, 2000 DTC 1507.\u00a0 That case concerned a taxable benefit that was assessed to Bure after the Vancouver Canucks paid his agent the fees due to the agent for negotiating a $25 million contract for Bure.\u00a0 Bure had instructed his agent that he would accept a contract of that magnitude, but that he had to get the entire amount, meaning the Canucks had to pay Bure\u2019s agent.\u00a0 That was an employment benefit, for which the Canucks issued Bure a T4A slip.\u00a0 He appealed, claiming that his agent, Ron Salcer, was acting for the Canucks, not for him.\u00a0 The Court did not believe him, and that was that.\u00a0 Appeal dismissed, and added to the grievances Pavel Bure held against the Canucks.<\/p>\n The last case is Nanne and Mikita v. The Queen<\/em>, 2000 DTC 1653.\u00a0 The case deals with whether payment of a surplus amount in the National Hockey League Pension Plan to Louis Nanne and Stan Mikita was subject to withholding tax under Part XIII of the Income Tax Act<\/em>. Louis Nanne played for the Minnesota North Stars and Stan Mikita for the Chicago Black Hawks.\u00a0 Neither was resident in Canada. The legal question was whether the pension payments related to services provided by the players during taxation years when each was \u201conly occasionally\u201d employed in Canada.\u00a0 Each played scheduled regular season games and playoff games in Canada (unless they were injured).\u00a0 Justice Beaubier has a lot of fun analyzing the evidence, before reaching the conclusion \u2013 that was obvious to anyone but an auditor \u2013 that playing a few games in Canada in the course of a gruelling NHL schedule constitutes employment in Canada that is only occasional.\u00a0 Appeal allowed.<\/p>\n One notable aspect of each of these cases is that each was over relatively modest sums, at least in the context of modern professional sports.\u00a0 Considering the current battle of millionaires and billionaires, a final case to consider is one that did not go to court.\u00a0 In 1996 the Winnipeg Jets were sold to a group in Phoenix.\u00a0 The sale was conducted in such a way that the owners avoided all provincial income tax on the gains resulting from the sale.\u00a0 Everybody agreed that the transaction complied with Manitoba\u2019s Income Tax Act<\/em>, which did not have a general anti-avoidance provision.\u00a0 To cure the problem, special, retroactive legislation was passed by the provincial legislature to overturn the result of the transaction and collect the tax Manitoba considered it was owed on the sale.<\/p>\n","protected":false},"excerpt":{"rendered":" As there is no NHL hockey to watch right now, the second best way to pass the time is to consider the interaction of hockey players and tax.\u00a0 Hockey players, and other professional athletes, have complicated tax lives.\u00a0 They often…<\/p>\n","protected":false},"author":13,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52],"tags":[],"class_list":["post-185","post","type-post","status-publish","format-standard","hentry","category-tax-blog-general"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/185","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=185"}],"version-history":[{"count":1,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/185\/revisions"}],"predecessor-version":[{"id":2849,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/185\/revisions\/2849"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}