A British woman won a legal fight against Australia’s “backpacker tax”. This ruling could have implications for other travelers.
Catherine Addy claimed she was unfairly taxed for the pay she earned as a waitress in Sydney, 2017.
She claimed that the tax, which was imposed in that year, discriminated against her because of her nationality.
The decision of Australia’s highest court has been awaiting the other backpackers who were affected by the same rule.
They might now be able ask Australian authorities for a review of their tax assessments.
This ruling concerns a working holiday visa, also known as the 417, which is available to foreigners between 18 and 31 years old.
Catherine Addy Biography/Wiki
Catherine Addy is from England who loves to travel across the world. She has backpacked across many countries. While coming to Australia, she got to know about backpacker tax as she was earning in Sydney in 2017. She went to the Australian court to review the tax assessment. She has now won the long battle in court for the tax.
Catherine Addy: Australia ‘backpacker tax’, British woman wins discrimination case
The High Court ruled Catherine Addy had been discriminated against because of her British nationality when she was made to pay a higher tax rate than Australian residents.
Speaking with the ABC, Ms Addy said the thousands of dollars owed to her would make a “huge difference in her life”.
Under controversial rules introduced in 2017, working holidaymakers on 417 visas must pay a 15 per cent levy on income up to $37,000.
In a unanimous decision, the court ruled in Ms Addy’s favour, finding the levy contravened a tax treaty with the United Kingdom.
The ruling could result in thousands of foreign workers from nations with similar tax treaties receiving refunds from the tax office.
It allows foreign nationals with 417 visas to be regarded under the law as residents of Australia for tax purposes, avoiding double taxation.
Ms Addy and TaxBack chief executive Joanne Murphy encouraged other backpackers to check whether they were also taxed incorrectly.
TaxBack funded Ms Addy appeal and have put the tax office on notice, suggesting it would consider sponsoring the cases of other backpackers.
But the tax office on Wednesday did not immediately respond to the ruling and indicated to employers they should not change tax withholding rates for backpackers.
“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.
Her legal team successfully argued that her British citizenship meant she was taxed in a more “burdensome” way than locals, which is prohibited by the tax agreement with Britain.
After a successful challenge of the tax in the Federal Court in 2019, the tax office appealed the ruling.
The full bench of the Federal Court upheld the appeal in August 2020, determining the backpacker tax was not discriminatory.
Ms Addy subsequently appealed to the High Court, who overturned the tax office’s appeal. In a unanimous decision, the court reinstated the original 2019 Federal Court ruling.
“The question is whether that more burdensome taxation was imposed on Ms Addy owing to her nationality. The short answer is ‘yes’,” the High Court ruled.
“When the position of Ms Addy is compared with that of an Australian national, as it must be, that is the only conclusion which may be drawn.”
The decision could cause embarrassment for Scott Morrison, who introduced the tax during his tenure as treasurer.
Catherine Addy Career
She has been working as a waitress in sydney, australia.
Catherine Addy Age
Catherine addy’s age is between 25 to 30 years.