British woman wins legal battle against Australia?s ?backpacker tax? - The Guardian Australia

On Wednesday the high court ruled in favour of Catherine Addy, finding the tax which slugged working holiday-makers thousands of dollars more than Australians discriminated against her on the basis of her nationality and infringed a treaty Australia signed with the UK.

The decision likely means the Australian Taxation Office will have to pay back taxes collected from up to 75,000 backpackers who worked in Australia, which has similar treaties with Chile, Finland, Japan, Norway, Turkey, Germany and Israel.

In December 2016 Australia legislated the backpacker tax charging working holiday-makers 15% on the first $37,000 they earn a year, a maximum liability of $5,550. Australians are entitled to a tax-free threshold for the first $18,200 they earn and are only liable to pay up to $3,572 if they earn $37,000.

Addy spent nearly two years in Australia between August 2015 and May 2017, earning $26,576 as a food and beverage waiter in Sydney in the 2017 tax year.

In October 2019 Addy won a challenge in the federal court arguing the tax discriminated against her on the basis of nationality and breached the Australia-UK treaty on avoidance of double taxation. In August 2020 the full federal court overturned the decision.

Addy appealed to the high court, arguing that if the backpacker tax had applied for the full year she earned $26,576, she would have been slugged $3,986 compared with an Australian who would pay just $1,591.

Joanna Murphy, the chief executive of Taxback.com, an international tax accounting and advisory firm that helped Addy bring the case, welcomed the high court decision.