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ARTICLE · 01 SEPTEMBER 2026

Tax Ruling Upheld for Non-Resident Professional Athletes

The Federal Court of Appeal has issued a significant ruling affecting the taxation of non-resident professional athletes in Canada. This decision provides important clarity on how tax obligations are determined for athletes competing across international borders. The ruling has implications for sports organizations, athletes, and tax practitioners dealing with cross-border employment taxation issues.

CanadaTax

Unanimous ruling in favour of former Blue Jays players draws a clear line on cross-border taxation

The Federal Court of Appeal has unanimously upheld the Tax Court of Canada’s 2024 decision in favour of former Toronto Blue Jays players Russell Martin and Joshua Donaldson in His Majesty the King v Martin and Donaldson, 2026 FCA 144 – a landmark ruling on how Canada taxes non-resident professional athletes.

What Was at Stake

At the heart of the dispute was whether the Canada Revenue Agency (CRA) could tax retirement compensation arrangement (RCA) contributions made by a Canadian employer on behalf of non-resident players beyond the portion attributable to services actually performed in Canada. RCAs, unregistered pension plans created under the Income Tax Act (Canada), are a key incentive used by professional Canadian sports teams to recruit international talent. 

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