High Court rules against backpacker tax

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Georgie Moore
(Australian Associated Press)


Australia’s highest court has ruled against the country’s so-called backpacker levy, finding it in breach of tax treaty clauses with the United Kingdom.

Working holidaymakers are required to pay a 15 per cent levy on income up to $37,000 under controversial rules introduced in 2017.

British backpacker Catherine Addy appealed a 2020 Federal Court ruling that sided with the Australian Taxation Office and upheld the levy’s validity.

The High Court on Wednesday found it imposed a more burdensome taxation requirement of Ms Addy because of her nationality.

Australian taxpayers are entitled to a tax-free threshold of $18,200.

For this reason, the levy was found to contravene a tax treaty clause with the United Kingdom regarding double taxation.

“The tax rate was more onerous for Ms Addy, a national of the United Kingdom, than it was for an Australian national in the same circumstances – doing the same work, earning the same income, under the same ordinary taxation laws,” the ruling said.

Ms Addy was in Australia on a working-holiday visa between 2015 and 2017.

In 2017, she worked as a waitress in Sydney and was an Australian resident for tax purposes.


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