Leafs reportedly secured Chris Tanev with a rare Canadian tax advantage
The Toronto Maple Leafs leveraged a significant tax advantage when signing free agent Chris Tanev on July 1st.
Despite the common belief that Canadian NHL teams are at a disadvantage due to high taxes, there are instances where tax laws can actually work in their favor. This was evident when the Maple Leafs signed top defensive free agent Chris Tanev.
Tanev, 34, was highly sought after by many teams for his rugged defensive style, which is crucial for building a strong Stanley Cup contender. The Maple Leafs prioritized signing Tanev and even traded a draft pick to secure an exclusive negotiation window.
Ultimately, they agreed on a six-year contract worth $4.5 million per season, keeping Tanev in Toronto until he's 40. Despite some criticism, the Maple Leafs utilized lesser-known tax benefits to secure the deal.
In a recent interview, Tanev discussed the tax implications of moving from Canada to the United States.
While playing in Dallas, Tanev wasn't subject to these taxes due to his short stay. However, a long-term deal in the U.S. would have subjected him to these taxes, including capital gains taxes on assets remaining in Canada. For someone like Tanev, who has played in Canada for so long, it wasn't worth it. Additionally, the Maple Leafs offered over $21 million in bonus money, making it hard for him to refuse.
This situation is particularly interesting given the frequent claims that Canadian teams face significant tax disadvantages. In this case, Canadian tax laws actually helped the Maple Leafs secure a top free agent.
Source: David Alter, The Hockey NewsChris Tanev Revealed That a 'Departure Tax' When Leaving Canada Was a Consideration Before Ultimately Signing With Maple Leafs
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