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Cameco Gets Favorable Ruling From Tax Court Of Canada Against CRA

Uranium producer Cameco (CCO.TO,CCJ) announced Thursday that the Tax Court of Canada has ruled unequivocally in favour of the company in its dispute of the reassessments issued by Canada Revenue Agency or CRA for the 2003, 2005 and 2006 tax years.

The Tax Court ruled that Cameco's marketing and trading structure involving foreign subsidiaries and the related transfer pricing methodology used for certain intercompany uranium sale and purchase agreements are in full compliance with Canadian laws for the tax years in question.

The court has referred the matter back to the Minister of National Revenue in order to issue new reassessments for the 2003, 2005 and 2006 tax years in accordance with the court's decision. The timing for the issuance of the revised reassessments along with refunds plus interest is uncertain.

The company noted that CRA has 30 days from the date of the decision to appeal to the Federal Court of Appeal. If appealed, Cameco estimates it would take about two years for the Federal Court of Appeal to hear and decide the matter.

If an appeal to the Supreme Court is pursued, Cameco estimates that a further two years would be required to receive a decision.

According to the company, the Tax Court decision is not legally binding for other tax years in dispute, but it believes there is nothing in the decision that would warrant a different outcome for the other tax years in question.

Cameco said it will be making an application to the court to recover the substantial costs incurred over the course of this case.

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