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November 3,2021

Andrew Campbell 

Catherine Addy, a British backpacker, won her High Court appeal against the Australian Taxation Office (ATO) on November 3. The court ruled that the levy imposed a more onerous tax condition on Ms. Addy due to her nationality, based on her earning A$26,576 as a waitress in two Sydney hotels between January and May 2017.

Ms. Addy claimed she was treated unfairly because of her nationality when she was required to pay income tax at a higher rate than Australian residents. Backpackers paid a flat rate, a 15% tax on income, under a British-Australian agreement, without the benefit of the tax-free threshold.

The backpacker tax was implemented in 2017 and applies to those who hold 417 and 462 visas, which allow young people aged 18 to 31 to travel to Australia for a working holiday. Ms. Addy brought her case to court with the assistance of the Irish firm Taxback.com. The ruling meant that the ATO could owe money to up to 820,000 backpackers who worked in Australia between 2017 and 2021.

Working holidaymakers from Chile, Finland, Germany, Israel, Japan, Norway, Turkey, and the United Kingdom who came to Australia may be eligible for a tax refund after the High Court ruled that the government's backpacker levy is discriminatory.