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Allegations of Tax Evasion by the Canadian Revenue Agency. During the annual audit in 2 0 0 8 , CRA identified issues with the transfer
Allegations of Tax Evasion by the Canadian Revenue Agency. During the annual audit in CRA identified issues with the transfer pricing approach employed by Cameco to set the price of uranium sold to its Swiss subsidiary. Based on this finding, CRA reassessed Cameco's earnings and the amount of tax payable for the years through The income for the years through was revised upwards respectively by $ million, $ million, and $ million, $ million, and $ million. The company had to make a cash payment of $ million to cover its increased tax liability for Cameco consolidated financial statements, accessed from SEDAR on July Cameco is contesting CRA's decision; however, Cameco's management has made a provision of $ million for the period of through Market analysts estimate that if CRA wins the case, the additional tax liability for the years through could be around $ million. Exhibit presents Cameco's consolidated income statements for the years through As Anderson studied the Cameco transfer pricing issue in more detail, it was not clear to her whether CRA's allegations were correct. If they were, it would be difficult to understand how the questionable practice could have gone on for so long, in spite of all the regulations and reporting requirements. Estimate the increased tax liability on Cameco if CRA wins the lawsuit against the company
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