Australia’s ‘backpacker tax’ is thrown out by court

75,000 travellers are in line for a tax rebate after court rules Australia’s ‘backpacker tax’ on foreign workers is illegal following complaint by British woman

  • Briton Catherine Addy won her battle with Australia’s tax authorities yesterday 
  • A court ruled she should not have faced a tax bill because of a UK-Australia pact
  • There are believed to be at least 75,000 working holidaymakers in Australia

Thousands of travellers to Australia could be in line for a refund after a British woman won her battle to have a ‘backpacker tax’ declared illegal. 

Drama student Catherine Addy is due a £1,100 rebate after a court in Brisbane ruled that the tax illegally targeted some foreign workers. 

The tax cannot be applied to British working visitors because of a double taxation treaty between Australia and the UK, the court ruled.

There are believed to be at least 75,000 working holidaymakers in Australia and the decision could cost the Canberra government millions of dollars. 

Drama student Catherine Addy (pictured) is due a £1,100 rebate after a court in Brisbane ruled that the tax illegally targeted some foreign workers 

Similar tax agreements are in place with the United States, Germany and several other countries. 

Many of Australia’s thousands of backpackers and seasonal workers come from those countries.  

‘In the context of these working holidaymakers, this is a really significant judgement,’ lawyer Mark Chapman said.   

‘There are a lot of them. There would be tens or even hundreds of thousands here on these working holidaymaker visas and a proportion of them would actually qualify as residents based on their circumstances.’

Ms Addy, from Bexleyheath, London, worked on a horse farm in Western Australia before waitressing at hotels in Sydney. 

A judge accepted that renting at a shared house in Sydney should not have left her with a tax bill.    

‘That is a disguised form of discrimination based on nationality,’ he said in his judgement, published on Wednesday. 

Catherine Addy (pictured), from Bexleyheath, London, worked on a horse farm in Western Australia before waitressing at hotels in Sydney

Catherine Addy (pictured), from Bexleyheath, London, worked on a horse farm in Western Australia before waitressing at hotels in Sydney 

There are believed to be at least 75,000 working holidaymakers in Australia (pictured: Sydney Harbour) and the decision could cost the Canberra government millions of dollars

There are believed to be at least 75,000 working holidaymakers in Australia (pictured: Sydney Harbour) and the decision could cost the Canberra government millions of dollars

Staying mainly in New South Wales after she arrived in Australia in 2015, Ms Addy was considered a ‘resident’ for tax purposes.  

According to the government website, others who travel from place to place can be classed as ‘foreign residents’ for taxation.  

The Australian Tax Office said it was considering whether to appeal the decision. 

It added the ruling only affects a minority of working holiday makers ‘who are also residents, and only those from countries affected by a similar clause in the double tax agreement with their home country’. 

Under laws introduced in January 2017, visitors on working holiday visas were no longer entitled to have a tax exemption on the first $18,200 they earned. 

A 15 per cent levy was applied to every dollar earned under two categories of working holiday visas.    

Canberra had originally sought a levy of up to 32.5 percent, but faced an outcry from farmers who rely on visitors for seasonal labour.  

Read more at DailyMail.co.uk