RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:strong dayIf a rich individual did what Cameco did, we would all want him/her to be strung up. Here is a summary of Cameco's trick. In 1999, Cameco set up a subsidiary, Cameco Europe Ltd., in low-tax Zug, Switzerland. Cameco then signed a 17-year deal to take the uranium it produces in Canada and sell it to Cameco Europe before it made its way to the end customer. By injecting a middleman into the transaction, Cameco is able to sell the uranium to Cameco Europe at the low prices reflective of 1999. As a result, Cameco is recording little to no profit in Canada. Instead, all the profits appear in Zug, where the tax rate is lower. A year ago, Cameco estimated it had avoided declaring $4.9-billion in Canadian income, saving it $1.4-billion in taxes, over 10 years. The company’s latest disclosure, accompanying its first-quarter earnings in late April, now show the numbers have grown to $5.7-billion in income it was able to avoid declaring, and $1.6-billion in tax savings for the 11 years ended in 2013. The tax-saving deal runs through 2016, so the numbers could continue to grow. Cameco now estimates it may have to submit somewhere between $625-million and $650-million to cover the disputed tax bills through 2013. The CRA is disputing both the corporate structure of the arrangement, saying it exists only for tax avoidance, and has no real business purpose. CRA also contests the prices used in the deal. Cameco needs to win on both to prevail. While Cameco says Cameco Europe has its own board of directors and a full-time CEO, documents in the case reveal the European company had no other full-time employees, and no stand-alone office, instead renting space from the law firm performing its legal work. Cameco’s Canadian employees performed nearly all the functions for Cameco Europe. “It is therefore difficult to see a reasonable business purpose to [Cameco Europe’s] existence, beyond tax minimization,” Veritas’ Pawel Rajszel and Dimitry Khmelnitsky say in their recent report.