Cameco says tax court rules in its favour in dispute with CRA

Cameco says the tax court has ruled in its favour in a dispute of reassessments issued by the Canada Revenue Agency for the 2003, 2005 and 2006 tax years.

The Saskatoon-based uranium miner said the court has referred the matter back to the Minister of National Revenue in order to issue new reassessments for the years in accordance with the court’s decision.

“We are very pleased with the tax court’s clear and decisive ruling in our favour,” Cameco president and CEO Tim Gitzel said Wednesday in a press release.

“We followed the rules, yet this dispute has caused significant uncertainty for our investors during a period of prolonged weakness in the markets for our products.”

The dispute focused on Cameco’s marketing and trading structure involving foreign subsidiaries and the related transfer pricing methodology used for certain intercompany uranium sale and purchase agreements.

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Cameco said the decision only relates to those three tax years, but it believes nothing in the decision would warrant a different outcome for other tax years in question.

“Now we hope CRA accepts the decision and applies it to other tax years in dispute, so we can focus on managing our business for the benefit of all our stakeholders,” Gitzel said.

CRA has 30 days to appeal the decision to the Federal Court of Appeal.

Cameco said it will be making an application to the court to recover the costs incurred over the course of this case.

The company resolved a tax dispute with the Internal Revenue Service (IRS) in the U.S in July 2017.

The dispute was for the tax years 2009 through 2012 and centred on whether Cameco set up a subsidiary in low-tax Switzerland and sold its uranium at a low price simply to avoid tax.

Cameco paid $122,000 U.S. to settle the dispute, far below the $122 million that had been proposed.

The company announced in July it was permanently laying off roughly 700 employees due to a weak uranium market, and the suspension of production at its Key Lake and McArthur River sites.

– With files from The Canadian Press