Australian court rules hike in backpacker tax discriminatory

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MELBOURNE (Reuters) – Australia’s High Court ruled that the country’s practice of taxing young working tourists at a higher rate than local Australians for the same work was discriminatory on Wednesday.

The case brought by British backpacker Catherine Addy, who worked as a waitress in Sydney in 2017, sought to show that she was being treated unfairly because of her nationality when she had to pay a higher tax rate than Australian residents .

Addy argued that having earned AU $ 26,576 between January and May 2017, she should have had access to the same tax exemption threshold as Australian residents, rather than being taxed at a flat rate of 15%. , reported the Australian Broadcasting Corp (ABC).

Australian residents do not pay tax on the first A $ 18,200 ($ 13,548) of their income.

Australia has an agreement with Britain and other countries that foreign nationals working in the country should not face a higher tax burden than local workers for the same job.

The High Court ruled in favor of Addy.

“The tax rate was more onerous for Ms Addy, a UK national, than an Australian national under the same circumstances – doing the same job, earning the same income, under the same ordinary tax laws,” said the jugement. noted.

The “backpacker tax” was established in 2017 and applies to young people with a working holiday visa aged 18 to 31. They are often employed in industries such as hospitality and fruit picking and the judgment comes as Australia prepares to reopen its borders to travelers.

The case may now lead other backpackers to seek review by the Australian tax office.

Australia’s tax office said it is reviewing the decision and will provide further guidance as soon as possible, according to the ABC.

($ 1 = 1.3434 Australian dollar)

(Reporting by Melanie Burton; Editing by Christian Schmollinger)


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