Ex-Blue Jays stars in legal fight over Canada pension: report

sports

To Mark Suleymanov

Jun 9, 2023 | 12:48am

Three former Blue Jays stars are reportedly in a legal battle with the Canada Revenue Agency over their pension plan contributions while playing for Toronto.

Josh Donaldson, Russell Martin and Jose Bautista are at odds with the CRA over the amount of income deducted on their tax returns based on contributions to the Retirement Compensation Agreement. According to the National Post.

It’s common for professional athletes playing for a limited time in Canada to set up an RCA as a way to defer or reduce their taxes so they can cash out in the event of a job loss or retirement.

The trio, who had an unforgettable postseason run for the Blue Jays in 2015 and 2016, face different hurdles in each case.

The CRA reportedly denied seven-time All-Star Bautista a deduction from $16 million in income from donations he made between 2014 and 2017, and his RCA was based on national income. He argued that it was not a pension system or a retirement compensation system. tax law.

But Bautista’s lawyers argued that Bautista’s contributions were made to “support his transition into retirement” and should be considered part of his pension plan.

Bautista hit 288 home runs in 10 seasons with Toronto from 2008 to 2017 and was a perennial MVP contender.

He finished his career in 2018 with three appearances in the NL East, including 83 games with the Mets.

As for Donaldson and Martin, their problem is where they claimed their residency when they donated to RCA.

The CRA reportedly argued that their deductible for Florida residents should be split between 60% of their time in the US and 40% of their time in Canada during the season.

According to the National Post, the CRA insists on calculating deductions before determining players’ time allocations in the United States and Canada.

Players argue that deductions should be calculated after the fact.

Depending on the outcome, Donaldson’s earnings could be up or down by $2.58 million, while Martin’s earnings could be adjusted by nearly $5 million.

A current Yankees third baseman, Donaldson played for Toronto from 2015 to 2018 and was named American League MVP in 2015.

Martin was a former Yankees catcher from 2011-2012 and spent four seasons with Toronto from 2015-2018.

Marie-France Dompierre, a tax attorney representing former Donaldson and Martin, said the case could deter players from considering signing with Canadian teams in the future. expressed.

“Canada’s high income tax rate may discourage professional athletes from joining teams based in Canada.” She said in a 2022 posting to Tax Notes International.

“The tax deferral feature often comes to the forefront in these discussions, which allows the Canadian team to attract talent by lowering income tax rates to levels similar to those enjoyed by members of the US-based team. because it may be possible to attract

The Donaldson-Martin case is set to go to court in July, but Bautista appealed in 2022 and is still pending.