Supreme Court Dismisses CRA Case Against Cameco

For any of the Macrodesiac's who bought shares in Cameco (NYSE: CCJ) last year, there has been some positive news...

On Thursday, Cameco said it has "received notice that the Supreme Court of Canada has dismissed Canada Revenue Agency's (CRA) application for leave to appeal the June 26, 2020 decision of the Federal Court of Appeal."

Here's what happened in Cameco's own words...

"In September 2018, the Tax Court of Canada ruled that Cameco's marketing and trading structure involving foreign subsidiaries, as well as the related transfer pricing methodology used for certain intercompany uranium sales and purchasing agreements, were in full compliance with Canadian law for the tax years in question.

"CRA appealed this decision to the Federal Court of Appeal, which in June 2020 again ruled definitively in Cameco's favour and upheld the Tax Court's finding. CRA sought leave to appeal the Court of Appeal's decision to the Supreme Court. Today the Supreme Court denied that request."

Or, in other words...

The uranium company now expects to receive a refund of $5.5 million plus interest for amounts paid on previous reassessments issued by CRA for 2003, 2005 and 2006, as well as the $10.25 million in legal fees and up to $17.9 million in disbursements for costs awarded by the Tax Court and the Court of Appeal in previous rulings.

Happy days.

And, here's a bit of a dig from Cameco's CEO...

"If CRA feels the laws aren't written the way they want, it's clear they need to make the case to government to change those laws moving forward rather than unfairly dragging Canadian businesses through long and costly legal processes," said Tim Gitzel.

Ouch!

However, the CRA is still holding onto approximately $785 million in cash and letters of credit that Cameco has been required to pay or otherwise secure for the 2007 through 2014 reassessments issued...

Cameco said the CRA should return the full amount given the "overwhelming clarity" of the courts' decision.

The company "will not be in a position to determine the definitive outcome of this dispute for any tax year other than 2003, 2005 and 2006 until such time as all reassessments have been issued advancing CRA’s arguments and a final resolution is reached for that tax year".

Despite the positive update, Cameco's share price moved lower following the news, trading at $16.20, down 3.34%.