Taxes on Noncitizen Temp Workers Held Illegal in Australia

Since 2017, Australia has been imposing a 15% tax  on noncitizens with “working holiday” or “work and holiday” visas. It was known as the “backpacker tax.”

Recently, the Federal Court of Australia held that this tax violated treaties between Australia and the UK, US, Germany, Finland, Chile, Japan, Norway and Turkey. That’s because the treaties require Australia to treat workers from these nations the same as Australian workers. Yet Australians are not taxed until their yearly income pops above A$18,200. The court determined the tax was a “disguised form of discrimination based on nationality.”

It’s possible that many workers who paid this tax will now be entitled to reimbursement.

-KitJ