Cameco wins procedural victory in offshore ‘transfer pricing’ tax battle – by Drew Hasselback (Financial Post – August 15, 2017)

Cameco Corp. has defeated the Canadian government’s attempt to force about 25 of the company’s senior executives to submit to questioning on how the company uses offshore entities to reduce its tax bill.

The Minister of National Revenue sought a federal court order that would have compelled a long list of the company executives, including current chief executive Tim Gitzel and former CEO Gerry Grandey, to be interviewed by Canada Revenue Agency staff.

The Minister’s request relates to audits of Cameco’s 2010, 2011 and 2012 tax returns. In particular, the CRA says it wants more information on how Cameco uses foreign subsidiaries to reduce its tax bills. The process is called “transfer pricing,” and Canada has rules on when and how it can be done.

Cameco and the Canadian government have already locked-horns over transfer pricing. In a separate and ongoing trial that has yet to be decided by a judge, Cameco is fighting its tax bills for the 2003, 2005 and 2006 tax years. Cameco denies the tax bills and says its dealings with foreign subsidiaries comply with Canadian law. Final arguments in the tax trial are expected in September, with a decision to follow 12 to 18 months after that.

The interview request decision, which was released August 10, is separate from the ongoing tax court trial, but still related to the transfer pricing issue.

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