• Service: Tax, Corporate Tax, Topics, Tax Reform, Resource Taxation
  • Industry: Energy & Natural Resources, Mining
  • Type: Regulatory update
  • Date: 8/08/2013

Tax Insights

KPMG's analysis of tax issues and developments.

James Macky

James Macky
National Leader, Tax Advisory Services

+61 3 9288 6890

High Court rejects MRRT claims 

by James Macky, Corporate Tax Specialist

As reported yesterday, the High Court of Australia (HCA) has handed down its decision in Fortescue Metals Group Limited & Ors v The Commonwealth of Australia [2013] HCA 34, dismissing claims that provisions within the Minerals Resource Rent Tax Act 2012 and associated imposition acts (together 'the MRRT Acts') were not valid laws because they breached the Constitution.

The appellants had sought to have the HCA impugn the MRRT Acts on the bases that the design of the Acts, which in effect provides a credit against MRRT liabilities for royalties paid by a miner:

  • discriminate between or provide preferences to States because royalty rates differ between States, or
  • limit a State’s ability to govern itself because the MRRT Acts effectively remove a State’s ability to encourage mining and associated economic activity through reducing royalty rates.


The HCA unanimously and seemingly without hesitation rejected each of these claims.


While there is much to commend the judgement, particularly for those interested in the history of the development of the revenue clauses within the Constitution and the case law that has considered them, it does not answer the question most MRRT taxpayers are now interested in – will the MRRT remain in place following the upcoming Federal Election?


Subject to some extraordinary policy changes by the parties, we will know the answer to this question once the election result and perhaps critically the Senate appointments from 1 July 2014 are determined.


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