On 26 September 2018, the Tax Court of Canada published its decision in Cameco Corporation (2018 TCC 195), resolving a long-running dispute between Cameco Corporation and the Minister of National Revenue involving reassessments to Cameco’s 2003, 2005, and 2006 taxation years.
The adjustments made in the reassessments related to the prices used in the purchase and sale of uranium contracts involving Cameco, Cameco European (CESA, a Swiss branch of Cameco's Luxembourg subsidiary) and, later, its Swiss subsidiary (CEL), as well as its US-based subsidiary (Cameco US) and third parties. The Minister's reassessments were based on arguments that Cameco's structure - specifically the reorganisation that took place in 1999 - was a sham. The Minister further argued that CESA/CEL performed few if any valuable functions during the years under consideration and, accordingly, that reassessments were warranted pursuant to either paragraphs 247(2)(b) and (d) or paragraphs 247(2)(a) and (c) of the Income Tax Act.
The attached Tax Insight focuses on the Court’s findings in respect of the sham argument.