Habs Halifax
Loyal Habs Fan
- Accountant? No.
- Do the Europeans have this same advantage in the US? To my knowledge No, or much less so. It relies on getting a large portion of your income tax deferred.
- Up to the player
- Players are paid in USD, so CAD/USD only comes into play for cost of living.
You can read more about it here:
RCA and professional athletes - GBL
The short cliff notes version is professional athletes can have a large portion of their salaries placed into a tax deferred Retirement Compensation Agreement. Then after the player retires any money withdrawn from the RCA is taxed based on player residence. If they stay in Canada then full Canadian taxes hit. If they retire to a country that has a tax treaty with Canada then they're taxed either at their own county's income tax rate or 15-25% if that country doesn't tax pension payments. For Russian players that's a pretty big potential tax savings with Russia's income tax rate of 13%.
Thanks for the in depth reply. It's interesting to put together and draw your own conclusions from it based on where that player is from and where they may retire. I guess that if it was a huge disadvantage or advantage by some cities vs the other, it would be a topic of discussion in the next CBA?
I just find it funny that Tampa was able to get Stamkos at $8.5M and Hedman at $7.875M when most feel they would of gotten way more in the open market. It's possible they took a pay cut to stay on a team to remain competitive but can do make this also happen with Kucherov very soon? We will see.
Look at Subban and Price with the Habs who have a large tax hit for example. Two players that signed massive deals to remain with the Habs but neither took a pay cut when they were close to being UFA's. If the goal was to remain competitive, don't you think they leave some money on table like Stamkos and Hedman did?