NHL-1 / September 2002 Note: Due to the Government of Alberta reorganization in November 2004, where applicable, the web versions of our documents have been updated to change references from "Minister of Revenue" or "Provincial Treasurer" to "Minister of Finance". References to "Revenue Canada" or "Canada Customs and Revenue Agency" have been changed to "Canada Revenue Agency" to reflect that name change as well. The paper version of this document is available from Tax and Revenue Administration and if applicable, will be updated as time permits. ALBERTA PERSONAL
INCOME TAX ACT INFORMATION CIRCULAR: This Information Circular discusses the following topics:
The player’s taxable salary for a game is determined in accordance with the following formula:
A is the base salary in effect on the day of the game played in Alberta; and B is the number of calendar days in the NHL regular season in which the game is played. The base salary of a player is the Paragraph 1 Salary as defined in the Collective Bargaining Agreement between the NHL and National Hockey League Players’ Association for the period September 16, 1993 to September 15, 2004. Signing bonuses, deferred compensation or performance bonuses are not to be included. For example, a player provides hockey duties or services to his team in a hockey facility in Alberta during the 2002-03 regular season. The season begins on October 9, 2002 and ends on April 6, 2003. Therefore, there are 180 calendar days in the 2002-03 season. The player plays a game in Calgary on December 31, 2002 and a game in Edmonton on January 2, 2003. The player’s base salary is $1,000,000. The player’s taxable salary for each game in Alberta is 1,000,000/180 or $5,555.56.
All NHL teams are required to withhold and remit 12.5% of the player’s taxable salary for all regular season games played in Alberta in the month. Amounts withheld are to be remitted to Alberta Finance, Tax and Revenue Administration (“TRA”) in U.S. funds by the 15th day of the following month. The remittances can be made via wire transfer or by cheque. If the remittance is to be made through wire transfer, contact TRA at (780) 427-3044, Monday through Friday 8:15 a.m. - 4:30 p.m. M.S.T. for banking information. Funds are to be received by TRA by the 15th day of the following month. Otherwise, interest will be imposed on the late remittance from the 15th day until the day the funds are received. The remittances made are to be supported by filing an NHL Players Tax Monthly Withholding Summary (AT254) with TRA electronically through the Internet at the same time remittances are made. The Internet is a direct and secure way to provide information. Information provided is protected by the privacy provisions of the Freedom of Information and Protection of Privacy Act. Teams can amend their remittances and send in the revised remittance, as required, any time before February 15 of the following year by writing to TRA. Revisions can not be made via the Internet. In amending their remittances, teams must specify the amount needed to be adjusted for each player. TRA may impose interest and/or a penalty to the team for deficient remittances. Over-remittances may be refunded without interest, on request, to the team for refunding to the corresponding player(s). Alternatively, the team may request the over-remittance be applied to the next remittance due by the team, specifying the amount of over-remittance to be applied for its player(s). The team must then ensure the appropriate players receive a credit in future periods. Teams are not required to file a year end reconciliation with TRA. However, each team must provide their players a summary of the remittances made to TRA throughout a calendar year no later than February 28 of the following year.
Each player is responsible for ensuring that his team has made the required remittances. If the player discovers that his team did not remit the correct amount of tax, the player must advise TRA in writing of the necessary corrections. If the team has underemitted, the player must also provide TRA with payment of the outstanding tax. If the team has over-remitted, a refund will be issued after the assessment unless otherwise requested. A player does not have to file a tax return for a calendar year with TRA unless his team failed to make any remittances for the year. Should a player, who was taxable during the year, discover that his team failed to make any remittances for the year, the player is required to file an NHL Players Tax Return (AT255) with TRA no later than April 30 of the following year. Every player shall on demand from the Minister of Finance (“Minister”) file an NHL Players Tax Return with the Minister. The Minister will demand returns from those players who are required to file a return but fail to do so by April 30 of the following year.
If remittances have been made on behalf of a player for a year, TRA will issue a Notice of Assessment to the player in March of the following year, stating the player’s NHL player tax assessed and whether there is over or under payment of tax based on remittances made by the team(s) on the player’s behalf for the year. The Notice of Assessment will be issued to the player and mailed to the current team on record that the player is playing for unless the player instructs TRA of a different mailing address. For a player who has to file a tax return as no remittances had been made on his behalf, a Notice of Assessment will be issued to the player at his mailing address shown on his completed NHL Players Tax Return or other address if known. A default Notice of Assessment may be issued if no return has been filed and after a demand to file has been issued. TRA may also issue a Notice of Assessment to a team for amounts not withheld, amounts not remitted, or in respect of interest and penalties imposed on the team, as discussed later in this information circular. Notices of Assessment will be issued in U.S. currency.
TRA can assess a penalty of 10% of the amount the team failed to remit when the amount is received past the due date, not remitted or not withheld. In cases where a team is subject to a penalty for any of the above reasons more than once in a calendar year, TRA may apply a 20% penalty to the second or later failures if they were made knowingly or under circumstances of gross negligence. If the player is required to file a return but fails to do so by April 30 of the following year, TRA may assess a penalty in the amount of 5% of the balance owing for the year, plus 1% of this balance for each full month that the return is late, up to a maximum of 12 months. If a player, who has already been assessed a penalty in respect of a failure to file a return for any of the three preceding taxation years, has been served with a demand for a return for the year, TRA may assess a penalty in the amount of 10% of the tax unpaid, plus 2% of the unpaid tax times the number of complete months (not exceeding 20) between the time that the return should have been filed and that time when it actually was filed. If a player, who has failed to report an amount of income on his return for any of the three preceding taxation years, fails to report an amount of income on his return, TRA may impose a penalty of 10% of the amount which was not reported. If a player makes a false statement in his return and the false statement was made knowingly or under circumstances amounting to gross negligence, TRA may assess a penalty of the greater of $100 and 50% of the amount by which the tax which would have been payable by the player had the false statement not been made in the taxation year, exceeds the amount of tax which would have been payable if the return was accepted as filed. Teams will be charged interest on amounts not withheld for the period beginning on the day the payment is due and ending on the earlier of the date payment is received or April 30 of the following year. Players will be charged interest on outstanding tax from April 30 of the following year. However, if a team has withheld but has not remitted the withheld amounts to TRA, the team will be liable to pay as tax the amounts withheld and be also charged interest on the unremitted amounts until the remittances are received. Interest will also be charged on penalties imposed. No further interest will be charged if the team or player(s) pays the entire balance outstanding on a Notice of Assessment within 35 days of the date of mailing of the Notice of Assessment. TRA may cancel or waive all or a portion of interest charges and penalties in situations where extraordinary circumstances prevented teams or players from fulfilling their obligations under the Act. Penalties and interest may also be waived in cases where TRA’s delay or error was the primary cause of the penalty or interest liability. Refer to corporate tax Information Circular CT-5 entitled “Waiver or Cancellation of Penalties and Interest” for examples of extraordinary circumstances. Information Circular CT-5 is one of a series of information circulars published by TRA. Information circulars are available from TRA’s website.
Credit balances on a Notice of Assessment will be refunded. Interest on refund and repayment to a player will be calculated from the latest of:
A refund of less than $20.00 will generally not be refunded.
Interest rates used will be those rates used in calculating interest under the Alberta Corporate Tax Act. The rate used in the calculation of interest charges is determined quarterly. For credit interest calculations, the rate is the average rate on three month Treasury Bills sold during the first month of the preceding quarter, rounded to the next whole percentage. For debit interest calculations, the rate is three and one-half (3.5) percentage points higher than the credit interest rate. TRA will post the quarterly interest rates on its website.
If the player disagrees with his assessment or reassessment, the player should contact TRA and attempt to resolve his disagreement first. If the player still disagrees, a formal objection can be made by filing a Notice of Objection together with a copy of his contract for the year and a letter from his team stating that he was paid in accordance with the contract. This information is to be filed with TRA on or before the later of the following two dates:
All information relating to objections should be sent to:
A separate Notice of Objection should be filed for each year in dispute. All applicable parts of the form must be completed. The form must be signed by the player. If the assessment is confirmed or varied by TRA, the player may appeal to the Court of Queen’s Bench within 90 days from the date the notice that the assessment was confirmed or varied was mailed. A player may also institute an appeal if 90 days have elapsed since he served a Notice of Objection on TRA and a decision has not been rendered.
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