February 22, 2017
John Tobin, partner and tax expert, was sought out by Bloomberg BNA to comment on a case concerning Cameco Corporation and the Canadian government’s claim that the company’s business model is a tax avoidance scam. The case is being closely watched due, in part, to the involvement of the company’s corporate bodies in the United States, its Swiss affiliate and because “practitioners are hoping the courts will clarify the interplay between major elements of Canada’s transfer pricing rules, as well as the appropriateness of the Canada Revenue Agency’s aggressive approach to transfer pricing disputes.” The court proceedings are due to conclude in March. John Tobin expands on the importance of the case in an excerpt below:
Cameco's fate in the tax court trial is also of interest to tax authorities in other countries, including the U.S., where the company has corporate entities involved in the transactions, said John J. Tobin, a senior tax partner in the Toronto office of Torys LLP.
If that's the case, the assessments in the two countries could overlap, and because a third country, Switzerland, is involved, Cameco may not be eligible for relief against double taxation under the Canada-U.S. Income Tax Convention, Tobin said Oct. 4.
“The issues involved—multi-country—and the fact there are court proceedings suggest that Competent Authority will not be available regarding any U.S. challenges,” he told Bloomberg BNA in an e-mail. “Therefore, there is a potential that the same income could be taxed in two or more different countries without corresponding relief available in the other countries.”
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