Barry Klarberg , a managing partner of Klarberg , Raiola & Associates in New York , says his company knows all the tricks to help athletes avoid paying higher taxes in Canada -- and claims the tax rate can be dropped to a level on par with the United States
firm represents more than 600 North American athletes and celebrities , including Mark Messier , Mike Modano , Mike Richter and Joe Nieuwendyk of the NHL , major league baseball players Al Leiter and Billy Wagner , and pop group 'N Sync.
There are ways of using signing bonuses and the use of an RCA trust ( Retirement Compensation Arrangement ) whereby you can actually keep the taxes near what a player would've paid in the U.S. , Klarberg
With a signing bonus , for instance , a player is subject to a maximum tax rate of only 15 per cent on that money.
Another option -- although it can be a complicated undertaking -- is a RCA trust that is charged a 25 per cent withholding tax upon disposition of the assets , Klarberg
Either way , you're effectively reducing the tax rate by reducing the amount of fully taxable income..He
said the main financial difference between the countries is additional federal taxes paid by Canadians.
The Canadian government ( at the highest tax bracket ) taxes somewhere around 48 per cent , compared with 38 per cent in the U.S..That 10 per cent difference somehow has to go away..
In Vince Carter's case , in rough terms it could mean a difference between taking home $48.88 million US after Canadian taxes versus $58.28 million after some finessing by tax experts.
said probably the largest unavoidable burden for American players is sales tax -- the federal GST and provincial sales taxes.
The big thing is the onerous sales tax up in Canada.You go into a store and they tack on so much to the back end.But on certain items that you're taking out the country , you can get the taxes refunded and we help do that for players , Klarberg
Still , he
emphasizes that for almost all players , money and taxes aren't the biggest factor.
Money can be a concern but you don't let the tax-tail wag the dog.