Tax Court of Canada rules in favour of Cameco
September 27 2018 - 12:27AM
Cameco (TSX: CCO; NYSE: CCJ) announced today that
the Tax Court of Canada has ruled unequivocally in favour of the
company in its dispute of the reassessments issued by Canada
Revenue Agency (CRA) for the 2003, 2005 and 2006 tax years.
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 for
the tax years in question.
“We are very pleased with the Tax Court’s clear and decisive
ruling in our favour,” said Tim Gitzel, Cameco’s president and CEO.
“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.”
The court has referred the matter back to the Minister of
National Revenue in order to issue new reassessments for the 2003,
2005 and 2006 tax years in accordance with the court’s decision.
The timing for the issuance of the revised reassessments along with
refunds plus interest is uncertain.
CRA has 30 days from the date of the decision to appeal to the
Federal Court of Appeal. If appealed, Cameco estimates it would
take about two years for the Federal Court of Appeal to hear and
decide the matter.
Decisions of the Federal Court of Appeal may be appealed to the
Supreme Court of Canada, but only if the Supreme Court agrees to
hear the appeal. If an appeal to the Supreme Court is pursued,
Cameco estimates that a further two years would be required to
receive a decision.
The Tax Court decision is not legally binding for other tax
years in dispute, but we believe there is nothing in the decision
that would warrant a different outcome for the other tax years in
question.
Cameco will be making an application to the court to recover the
substantial costs incurred over the course of this case.
We have posted the Tax Court decision on our website at
cameco.com. We invite you to join a conference call on Thursday,
September 27, 2018 at 8:00 a.m. Eastern to discuss the decision and
its implications for Cameco.
To join the call, please dial 800-319-4610 (Canada and US
toll-free) or 604-638-5340. An operator will put your call through.
The slides and a live webcast of the conference call will be
available from a link at cameco.com.
A recorded version of the proceedings will be available on our
website shortly after the call, and on post view until midnight,
Eastern, October 27, 2018, by calling 800-319-6413 (Canada and US
toll-free) or 604-638-9010 (Passcode 2632).
Profile
Cameco is one of the world’s largest uranium producers, a
significant supplier of conversion services and one of two Candu
fuel manufacturers in Canada. Our competitive position is based on
our controlling ownership of the world’s largest high-grade
reserves and low-cost operations. Our uranium products are used to
generate clean electricity in nuclear power plants around the
world. Our shares trade on the Toronto and New York stock
exchanges. Our head office is in Saskatoon, Saskatchewan.
Caution Regarding Forward-Looking Information and
Statements
This news release includes statements and information about our
expectations for the future, which we refer to as forward-looking
information. Forward-looking information is based on our current
views, which can change significantly, and actual results and
events may be significantly different from what we currently
expect. Examples of forward-looking information in this news
release include our hope to pursue managing our business for the
benefit of all of stakeholders, the uncertain timing for the
issuance of revised reassessments and refunds, our time estimates
for the appeals processes in the event that CRA appeals the Court’s
decision, and the implications of the decision for the resolution
of the dispute with CRA for other tax years. Material risks that
could lead to different results include a determination by CRA to
appeal the Court’s decision, the risk that disputes for other tax
years will not be resolved on a similar basis and unexpected delays
in the appeals process. In presenting this forward-looking
information, we have made assumptions which may prove incorrect
about our ability to pursue our business objectives, CRA’s
willingness to accept the decision, our ability to resolve disputes
for other years in a similar manner, and the timing of the appeals
process. Forward-looking information is designed to help you
understand management’s current views of our near-term and
longer-term prospects, and it may not be appropriate for other
purposes. We will not necessarily update this information unless we
are required to by securities laws.
Investor
inquiries: |
Rachelle Girard |
306-956-6403 |
|
|
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Media
inquiries: |
Carey Hyndman |
306-956-6317 |
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