British waitress wins legal battle over Australia’s ‘backpacker tax’ after judge rules she paid ‘more burdensome’ rate due to her nationality over two years
- Catherine Addy won a landmark court case against the tax office over her pay
- Federal Court judge accused them of discriminating against working tourists
- Victory could see thousands of overseas holidays makers get refunds from ATO
A British woman has won a legal battle against the Australian Taxation Office after the High Court of Australia ruled she had been subjected to a ‘more burdensome taxation’ due to her nationality.
Catherine Addy lived and worked in Australia between August 2015 and May 2017 while holding a working holiday visa.
She earned 26,576 Australian dollars (£14,508) in 2017 while working as a waitress in Sydney and was an Australian resident for tax purposes that year.
In Australia, anyone on a working holiday visa is subject to a 15% tax on money they earn up to 37,000 dollars (£20,200) however, Australian nationals get a tax-free threshold of 18,200 dollars (£9,938).
Lawyers for Ms Addy successfully argued these ‘backpacker tax’ rules contravened a ‘double taxation’ agreement Australia has with the UK, which requires British nationals to be taxed equally to Australian nationals ‘in the same circumstances, in particular with respect to residence’.
In a judgment handed down on Wednesday, the High Court of Australia said: ‘The question is whether that more burdensome taxation was imposed on Ms Addy owing to her nationality. The short answer is “yes”.
Ms Addy has won a legal battle against the Australian Taxation Office after High Court ruling
Catherine Addy lived and worked in Australia between August 2015 and May 2017
She earned 26,576 Australian dollars (£14,508) in 2017 while working as a waitress in Sydney
‘Ms Addy’s circumstances in the 2017 income year including that of her residency in Australia for taxation purposes were relevantly the same as an Australian national.
‘She did the same kind of work and earned the same amount of income from the same source; yet an Australian national was required… to pay less tax.’
The Mercury reports Ms Addy and TaxBack chief executive Joanne Murphy encouraged other backpackers to check their taxes.
TaxBack funded Ms Addy appeal and have told the tax office it could have other cases on the horizon.
In Australia, anyone on a working holiday visa is subject to a 15% tax on money they earn
The tax office on Wednesday did not immediately respond to the ruling and said employers should carry on as before.
‘The ATO is currently considering this decision and will provide further guidance as soon as possible,’ the tax office said.
‘This decision is only relevant where the working holidaymaker is both an Australian resident for tax purposes and from Chile, Finland, Japan, Norway, Turkey, the United Kingdom, Germany or Israel.
‘Working holidaymakers who may potentially be affected by this decision are encouraged to check the ATO website for updated guidance prior to lodging or amending a return or lodging an objection.’
Ms Addy worked as a waitress in two Sydney hotels for five months in 2017 and earned $26,576.
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