Uranium miner Cameco said on Monday that it would receive a refund of C$300-million from the Canada Revenue Agency (CRA) in its long-standing tax dispute with the agency.
The CRA has issued revised assessments for the 2007 through 2013 tax years that will result in the company being refunded a total of C$300-million, consisting of C$89-million in cash and C$211-million in letters of credit.
A series of court decisions in Cameco’s favour for the 2003, 2005 and 2006 tax years determined that the income earned by the company’s foreign subsidiary from the sale of non-Canadian-produced uranium was not taxable in Canada. In accordance with these decisions, CRA has issued reassessments reducing the proposed transfer pricing adjustment from $5.12-billion to $3.25-billion, resulting in a reduction of $1.87-billion in income taxable in Canada compared to the previous reassessments issued to Cameco for the 2007 through 2013 tax years.
Cameco stated that, while the pending return of C$300-million in cash and security was positive and certainly warranted, the broader tax dispute with CRA remained ongoing.
“CRA continues to hold a further C$480-million, consisting of C$206-million in cash and C$274-million in letters of credit, that Cameco has remitted or secured to date, tying up a significant portion of our financial capacity,” the mining company stated.
The remaining transfer pricing adjustment of $3.25-billion for the 2007 to 2013 tax years relates to the sale of Canadian-produced uranium by the foreign subsidiary. Cameco maintained that the court rulings already rendered in this dispute likewise applied to these amounts, and that CRA should fully reverse the remining transfer pricing adjustments for these years, return the full amount of cash and security being held.
In October 2021, Cameco filed a notice of appeal with the Tax Court of Canada for the years 2007 through 2013. A year later, the firm also filed an appeal with the Tax Court for the years 2014 and 2015, and recently filed a notice of objection for 2016.