Court rules Australia's backpacker tax as discriminatory 2 months ago

Court rules Australia's backpacker tax as discriminatory

Some believe it might mean changes down the line for Irish people in Australia.

The federal court in Australia has ruled that the so-called "backpacker tax" could not be levied against some backpackers because it violated pre-existing agreements with some countries.

In 2017, the government imposed a controversial 15% tax rate on two visa categories for working holiday-makers.

In the ruling in Australia's federal court on Wednesday, Justice Logan accepted the argument put forward by Taxback.com that the tax contravenes non-discrimination clauses built into tax treaties that Australia has signed with the UK, the US, Germany, Finland, Chile, Japan, Norway and Turkey.

Australian residents are not taxed on income they earn up to a threshold of $18,200, but the 15% tax rate applied to people on a working holiday visa from the first dollar they earn.

While this initial ruling does not affect Irish people on working holiday visas, Taxback.com, who organised the lawsuit, believe it could have a knock-on effect in the future.

In a statement to JOE, Joanna Murphy, CEO of Taxback.com said: “While the judgement itself does not directly impact Irish backpackers, we believe that the Australian Taxation Office will now have to consider the position of all working holiday visa holders in terms of taxation.

"This case may well act as a catalyst for changes to be made across the board. Ireland has a long and established history of people travelling to Australia for the backpacker adventure – for thousands of people, this has been a rite of passage.

"It is our hope that today’s verdict will prompt the ATO to make changes so that the tax treatment of workers of all nationalities is fair and equitable."