The Tax Court of Canada has ruled in favour of leading uranium miner Cameco in a CAD2.2bn transfer pricing dispute with the Canada Revenue Agency (CRA).
Cameco had disputed reassessments issued by CRA for the 2003, 2005, and 2006 tax years.
In its decision delivered on September 26, 2018, in the case of Cameco Corporation vs. Her Majesty the Queen, the Tax Court ruled that Cameco’s marketing and trading structure involving foreign subsidiaries and the related transfer pricing methodology used for certain intercompany uranium sale and purchase agreements are in full compliance with Canadian laws.
The Tax Court ruled that none of the transactions, arrangements, or events in issue in the appeals was a sham. “The Minister’s transfer pricing adjustments for each of the taxation years shall be reversed,” the Tax Court said.
The Tax Court referred the matter back to the Minister of National Revenue to issue new reassessments for the disputed tax years.
The CRA has 30 days to appeal against the decision.
Tim Gitzel, Cameco’s president and CEO, welcomed the decision: “We are very pleased with the Tax Court’s clear and decisive ruling in our favour. We followed the rules, yet this dispute has caused significant uncertainty for our investors during a period of prolonged weakness in markets for our products. 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.”