2017-08-17 Cameco wins PROCEDURAL victory, offshore ‘transfer pricing’ tax battle (avoided declaring $4.9 billion income), (doesn’t mean they’ve won the case) Financial Post
Just checking the progress of the CRA (Revenue Canada) case against Cameco.
Related: 2013-05-01 Cameco’s $800-million tax battle, Globe & Mail
The uranium producer estimates it has avoided declaring $4.9-billion in Canadian income, saving it $1.4-billion in taxes, over the last 10 years.
Cameco has blocked the government’s attempt to force 25 of the company’s senior executives to attend oral interviews on the company’s tax strategies
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.
In support of the motion for the order to question the executives, the Minister argued in the Federal Court of Canada that the CRA’s auditing power under the Income Tax Act includes the right to conduct on-the-record, oral interviews with all the executives it wants.
Cameco argued that while the CRA’s powers are broad, they’re not unlimited. The company was willing to accommodate the government’s requests in several ways. It was prepared to make a few executives available for interviews, and it offered to respond to written questions. But Cameco said it was unreasonable for the CRA to compel about 25 executives to answer questions in the presence of a court reporter. The judge agreed.
“If the Minister’s position is accepted, the CRA can compel oral interviews from as many persons as they see fit without any procedural limits,” wrote Justice Glennys McVeigh. “The time and cost involved in allowing the Minister to interview more than 25 Cameco personnel scattered across the world is not proportional to the information being sought.”
dhasselback at nationalpost.com