After the High Court of Australia ruled that she was subject to a’more burdensome’ taxation because of her nationality, a British woman won a legal battle against Australia’s Taxation Office.
Catherine Addy lived and worked as an Australian tourist between August 2015 to May 2017.
She earned 26,576 Australian dollars (£14,508) in 2017 while working as a waitress in Sydney and was an Australian resident for tax purposes that year.
In Australia, anyone on a working holiday visa is subject to a 15% tax on money they earn up to 37,000 dollars (£20,200) however, Australian nationals get a tax-free threshold of 18,200 dollars (£9,938).
Lawyers for Ms Addy successfully argued that these ‘backpacker taxes’ rules were in violation of a double taxation’ agreement Australia has with the UK. This requires British nationals to pay the same tax as Australians, particularly with respect to residence.
The High Court of Australia ruled on Wednesday that Ms Addy was subject to a more burdensome taxation because of her nationality. The short answer to this question is “yes”.
Ms Addy has won a legal battle against the Australian Taxation Office after High Court ruling
Catherine Addy lived in Australia and worked there between August 2015 – May 2017.
She earned 26,576 Australian dollars (£14,508) in 2017 while working as a waitress in Sydney
“Ms Addy’s 2017 income year, including her residency in Australia for taxation purposes, was relevantly the same as that of an Australian national.
“She did the exact same work and earned the identical amount of income from the source. Yet, an Australian national was required…to pay less tax.
Joanne Murphy, TaxBack chief executive and Mercury Reports Ms Addy encouraged backpackers not to forget about their taxes.
TaxBack funded Ms Addy’s appeal and told the tax department that they could have other cases.
A working holiday visa holder in Australia is subjected to a 15% tax on any money they earn
The tax office did not respond to Wednesday’s ruling immediately and advised employers to continue doing business as before.
According to the tax office, ‘The ATO is currently considering that decision and will provide additional guidance as soon possible.
‘This decision applies only to working holidaymakers who are both Australian residents for tax purposes and are from Chile, Finland Japan Norway, Turkey, Chile, Germany, or Israel.
“Working holidaymakers that may be affected by this decision are advised to visit the ATO website for up-to-date guidance before lodging, amending, or lodging an objection.
Ms. Addy worked five months as a waitress at two Sydney hotels in 2017, earning $26,576.