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Income taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax [Absract] |
Income taxes | 21. Income taxes A. Significant components of deferred tax assets and liabilities
|  | Recognized in earnings |  |  | As at December 31
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018
Assets |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment | $ | 74,039 |  | $ | 119,132 |  | $ | 319,185 |  | $ | 245,206
Provision for reclamation |  | 2,325 |  |  | (36,622) |  |  | 193,514 |  |  | 191,189
Inventories |  | (2,163) |  |  | 1,137 |  |  | - |  |  | 2,163
Foreign exploration and development |  | (14) |  |  | (14) |  |  | 5,267 |  |  | 5,281
Income tax losses (gains) |  | (108,839) |  |  | 39,289 |  |  | 390,341 |  |  | 499,180
Defined benefit plan actuarial losses |  | - |  |  | - |  |  | 7,947 |  |  | 5,646
Long-term investments and other |  | (17,377) |  |  | 24,169 |  |  | 40,423 |  |  | 57,347
Deferred tax assets |  | (52,029) |  |  | 147,091 |  |  | 956,677 |  |  | 1,006,012
Liabilities |  |  |  |  |  |  |  |  |  |  |
Inventories |  | 301 |  |  | - |  |  | 301 |  |  | -
Deferred tax liabilities |  | 301 |  |  | - |  |  | 301 |  |  | -
Net deferred tax asset (liability | $ | (52,330) |  | $ | 147,091 |  | $ | 956,376 |  | $ | 1,006,012
Deferred tax allocated as |  |  |  |  |  |  |  | 2019 |  |  | 2018
Deferred tax assets |  |  |  |  |  |  | $ | 956,376 |  | $ | 1,006,012
Deferred tax liabilities |  |  |  |  |  |  |  | - |  |  | -
Net deferred tax asset |  |  |  |  |  |  | $ | 956,376 |  | $ | 1,006,012
Cameco has recorded a deferred tax asset of $956,376,000 (December 31, 2018 - $1,006,012,000). The realization of this deferred tax asset is dependent upon the generation of future taxable income in certain jurisdictions during the periods in which the Company’s deferred t ax assets are available. The Company considers whether it is probable that all or a portion of the deferred tax assets w ill not be realized. In making this assessment, management considers all available evidence, including recent financial operations, projected future taxable income and tax planning strategies. Based on projections of future taxable income over the periods in which the deferred tax assets are available, realization of these deferred tax assets is probable and consequently the deferred tax assets have been recorded. B. Movement in net deferred tax assets and liabilities
|  | 2019 |  |  | 2018
Deferred tax asset at beginning of year | $ | 1,006,012 |  | $ | 848,704
Recovery (expense) for the year in net earnings |  | (52,330) |  |  | 147,091
Recovery (expense) for the year in other comprehensive income |  | 2,754 |  |  | (851)
Change to equity accounting - JV Inkai |  | - |  |  | 10,849
Effect of movements in exchange rates |  | (60) |  |  | 219
End of year | $ | 956,376 |  | $ | 1,006,012
C. Significant components of unrecognized deferred tax assets
|  | 2019 |  |  | 2018
Income tax losses | $ | 280,330 |  | $ | 270,154
Property, plant and equipment |  | 2,321 |  |  | 2,344
Provision for reclamation |  | 75,082 |  |  | 88,036
Long-term investments and other |  | 70,380 |  |  | 72,500
Total | $ | 428,113 |  | $ | 433,034
D. Tax rate reconciliation T he provision for income taxes differs from the amount computed by applying the combined expected federal and provincial income tax rate to earnings before income taxes. The reasons for these differences are as follows:
|  |  |  | 2019 |  |  | 2018
Earnings before income taxes and non-controlling interest | $ | 135,018 |  | $ | 39,929
Combined federal and provincial tax rate |  | 26.9% |  |  | 26.9%
Computed income tax expense |  | 36,320 |  |  | 10,741
Increase (decrease) in taxes resulting from: |  |  |  |  |
| Difference between Canadian rates and rates |  |  |  |  |
|  | applicable to subsidiaries in other countries |  | 5,558 |  |  | (78,138)
| Change in unrecognized deferred tax assets |  | 19,646 |  |  | 18,027
| Share-based compensation plans |  | 1,146 |  |  | 1,292
| Change in tax provision related to transfer pricing |  | - |  |  | (61,000)
| Non-deductible (non-taxable) capital amounts |  | - |  |  | (13,249)
| Income in equity-accounted investee |  | (12,074) |  |  | -
| Change in uncertain tax positions |  | 2,572 |  |  | (3,517)
| Other permanent differences |  | 7,909 |  |  | (462)
Income tax expense (recovery) | $ | 61,077 |  | $ | (126,306)
E. Earnings and income taxes by jurisdiction
|  |  | 2019 |  |  | 2018
Earnings (loss) before income taxes |  |  |  |  |
| Canada | $ | 229,429 |  | $ | (257,291)
| Foreign |  | (94,411) |  |  | 297,220
|  | $ | 135,018 |  | $ | 39,929
Current income taxes |  |  |  |  |
| Canada | $ | 7,969 |  | $ | 5,913
| Foreign |  | 778 |  |  | 14,872
|  | $ | 8,747 |  | $ | 20,785
Deferred income taxes (recovery) |  |  |  |  |
| Canada | $ | 60,010 |  | $ | (149,284)
| Foreign |  | (7,680) |  |  | 2,193
|  | $ | 52,330 |  | $ | (147,091)
Income tax expense (recovery) | $ | 61,077 |  | $ | (126,306)
F. Reassessments Canada In 2008, as part of the ongoing annual audits of Cameco's Canadian tax returns, Canada Revenue Agency (CRA) disputed the transfer pricing structure and methodology used by Cameco and its wholly owned Swiss subsidiary, Cameco Europe Ltd., in respect of sale and purchase agreements for uranium products. From December 2008 to date, CRA issued notices of reassessment for the taxation years 2003 through 2013, which in aggregate have increased Cameco's income for Canadian tax purpos es by approximately $5,700,000,000. CRA has also issued notices of reassessment for transfer pricing penalties for the years 2007 through 2011 in the amount of $371,000,000. It is uncertain whether CRA will reassess Cameco's tax returns for subsequent year s on a similar basis and if these will require Cameco to make future remittances or provide security on receipt of the reassessments. On September 26, 2018, the Tax Court of Canada (Tax Court) ruled in our favour in our case with the Canada Revenue Agency (CRA) for the 2003, 2005 and 2006 tax years. The Tax Court ruled that our marketing and trading structure involving foreign subsidiaries and the related transfer pricing methodology used for certain intercompany uranium purchase and sale agreements were in full compliance with Canadian laws for the three tax years in question. While the dec ision applies only to the three tax years in question, we believe there is nothing in the decision that would warrant a materially different o utcome for subsequent tax ye ars. We expect to recover any amounts remitted or secured as a result of the reassessments. On October 25, 2018, CRA filed a notice of appeal with the Federal Court of Appeal. We anticipate that it will take about two years from the start of the appeal pro cess to receive a decision from the Federal Court of Appeal. We expect the Tax Court’s decision to be upheld on appeal. We expect any further actions regarding the tax years 2007 through 2013 will be suspended until the three years covered in th e decision are finally resolved. Despite the fact that we believe there is no basis to do so, and it is not our view of the likely outcome, CRA may continue to reassess us using the methodology it used to reassess the 2003 through 2013 tax years. In that scenario, an d including the $5,700,000,000 already reassessed, we expect to receive notices of reassessment for a total of approximately $8,700,000,000 for the years 2003 through 2019, which would increase Cameco’s income for Canadian tax purposes and result in a rela ted tax expense of approximately $2,600,000,000. In addition to penalties already imposed, CRA may continue to apply penalties to taxation years subsequent to 2011. As a result, we estimate that cash taxes and transfer pricing penalties would be between $1,950,000,000 and $2,150,000,000. In addition, we estimate there would be interest and instalment penalties applied that would be material to Cameco. While in dispute, we would be responsible for remitting or otherwise securing 50% of the cash taxes and tra nsfer pricing penalties (between $970,000,000 and $1,070,000,000), plus related interest and instalment penalties assessed, which would be material to Cameco. Under Canadian federal and provincial tax rules, the amount required to be remitted each year wil l depend on the amount of income reassessed in that year and the availability of elective deductions. CRA disallowed the use of any loss carry-backs to be applied to any transfer pricing adjustment, starting with the 2008 tax year. In light of our view of the likely outcome of the case, we expect to recover the amounts remitted to CRA, including cash taxes, interest and penalties totalling $303,222,000 already paid as at December 31, 2019 (December 31, 2018 - $303,222,000) (note 10). In addition to the cash remitted, we have provided $480,000,000 in letters of credit to secure 50% of the cash taxes and related interest. Management believes that the ultimate resolution will not be material to Cameco's financial position, results of operations or liquidit y in the year(s) of resolution. Resolution of this matter as stipulated by CRA would be material to Cameco’s financial position, results of operations or liquidity in the year(s) of resolution and other unfavourable outcomes for the years 2003 to date coul d be material to Cameco's financial position, results of operations and cash flows in the year(s) of resolutio n. G. Income tax losses At December 31, 2019, income tax losses carried forward of $2,509,669,000 (2018 - $2,809,926,000) are available to reduce taxable income. These losses expire as follows:
Date of expiry |  | Canada |  | US |  | Other |  | Total
2026 | $ | - | $ | - | $ | 80,000 | $ | 80,000
2030 |  | 47 |  | - |  | - |  | 47
2031 |  | - |  | 20,859 |  | - |  | 20,859
2032 |  | 272 |  | 22,464 |  | - |  | 22,736
2033 |  | 173,691 |  | 38,296 |  | - |  | 211,987
2034 |  | 322,359 |  | 21,125 |  | - |  | 343,484
2035 |  | 372,558 |  | 14,699 |  | - |  | 387,257
2036 |  | 209,265 |  | 44,674 |  | - |  | 253,939
2037 |  | 143 |  | 33,462 |  | - |  | 33,605
2038 |  | 5,581 |  | 51,896 |  | - |  | 57,477
2039 |  | 6,524 |  | 40,559 |  | - |  | 47,083
No expiry |  | - |  | - |  | 1,051,195 |  | 1,051,195
| $ | 1,090,440 | $ | 288,034 | $ | 1,131,195 | $ | 2,509,669
Included in the t able above is $1,048,264,000 (2018 - $987,639,000) of temporary differences related to loss carry forwards whe re no future benefit has been recognized.

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