Canada Revenue Agency Appeals Cameco Tax Court Decision

Cameco (TSX:CCO; NYSE:CCJ) has received notification that the Canada Revenue Agency has filed an appeal with the Federal Court of Appeal regarding the September Tax Court of Canada which found in favour of Cameco for tax years 2003, 2005 and 2006.

Cameco is one of the leading global uranium producers supplying a significant amount of the international uranium supply.

As quoted from the press release:

“We are disappointed that the CRA has taken this action after such a clear and decisive ruling from the Tax Court,” said Tim Gitzel, Cameco’s president and CEO. “We will continue through the appeal process and expect the appeal to be decided in our favour as well.

“We are pleased that the CRA did not appeal Justice Owen’s decision that sham does not apply,” Gitzel said. “We do not agree with their remaining grounds for appeal. We hope to have a reasoned discussion with the CRA to see if we can reach a resolution for all years based on the principles laid out in the ruling.”

Cameco estimates it would take about two years for the Federal Court of Appeal to hear and decide the matter.

Decisions of the Federal Court of Appeal may be appealed to the Supreme Court of Canada, but only if the Supreme Court agrees to hear the appeal. If an appeal to the Supreme Court is pursued, Cameco estimates that a further two years would be required to receive a decision.

Despite CRA’s appeal, Cameco will be making an application to the court to recover substantial costs incurred over the course of this case. The actual cost award will be at the discretion of the Tax Court.

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