Mining behemoth Barrick Gold has lost a High Court tax case that will keep $55 million of stamp duty with the State Government and could deter similar claims from other miners.

Barrick, which owns 50 per cent of Kalgoorlie’s Super Pit, had argued that much of the value of Placer Dome’s WA gold mines it purchased in 2006 was goodwill.

This meant the land value of the purchase was less than 60 per cent of the total, excluding the deal from WA stamp duty.

The High Court’s decision noted that goodwill for legal purposes was unrelated to the accounting definition of goodwill and was derived from what adds value to a business by attracting customers.

The decision stated that Placer was a land-rich company that had no material property comprising legal goodwill.

The ruling reversed a WA Supreme Court decision in September 2017 against the Commissioner of State Revenue.

At the time, EY Law Director Scott Grimley, who worked for Barrick on the case, said the Supreme Court decision could spur other companies to review past stamp duty assessments.

“There’s a number of mining transactions over the last 10 or 12 years since they brought in listed land-rich duties ... and there’s a number of transactions over time where the application of those land-rich rules is relevant,” he said.

A spokesman for WA Treasurer Ben Wyatt said the case involved complex legal principles that it is reviewing to determine the full implications of the decision.

“However, it appears to set a very significant legal precedent that will impact a small number of cases on hand and similar transactions into the future,” he said.

 

Image: Barrick Gold has a half-share stake in Kalgoorlie Super Pit, The West Australian