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Australia’s ‘backpacker tax’ illegally targets foreigners, court rules
- A 15 per cent levy on every dollar earned has been applied on foreign workers since 2017 for working holiday visas linked to seasonal labour
- Public broadcaster ABC estimates up to 75,000 backpackers could be in line for a refund now that tax has been found to be illegal
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Australia’s “backpacker tax” illegally targeted some foreign workers, a court ruled Wednesday, leaving people who spent time in the country on holiday working visas in line for tax rebates.
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From 2017, Canberra applied a 15 per cent levy for every dollar earned for two categories of working holiday visas linked to seasonal labour.
In a landmark decision Wednesday, a Brisbane court ruled the levy – dubbed the “backpacker tax” – cannot be applied to a British woman because of a double taxation treaty between Australia and the UK.
Similar agreements are also in place with the United States, Germany, Finland, Chile, Japan, Norway and Turkey according to international accounting firm Taxback.com.
It was very clear when the tax was introduced in 2016 that it discriminated against foreign workers
“That is a disguised form of discrimination based on nationality,” judge John Logan said.
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Australians begin paying tax once their annual income exceeds A$18,200 (US$12,490). That was also the previous threshold for the working holiday visas.
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