Backpackers, holiday workers can get backpacker tax back in Australia after court ruling

Up to 75,000 backpackers could receive hundreds of millions of dollars from the Australian Tax Office (ATO) after the Federal Court ruled the government's so-called "backpacker tax" invalid.

According to the report of the Australian Broadcasting Corporation (ABC), a 15-percent backpacker tax is applied to all working holiday makers who earn less than 18,200 dollars (12,550 U.S. dollars) per year.

Up to 150,000 backpackers and young overseas workers arrive in Australia on working holidays each year and undertake jobs such as picking fruit or working in restaurants and bars, to help fund their holiday.

Catherine Addy came to Australia on a working holiday visa in 2015 and worked in the hospitality industry. She was slugged with the 15 percent tax, which she felt was unfair because local residents did not have to pay that. So she took her case to court.

On Wednesday evening, the Federal Court handed down its landmark ruling.

It said the tax was a "form of discrimination based on nationality" and could not be applied to a British woman living in Australia on a working holiday visa because it was in contravention of a non-discrimination clause in a double taxation treaty between the two countries.

The tax on working holiday makers has meant that, to date, any foreigner on 417 or 462 visas earning less than 18,200 dollars has had to pay 15 percent tax, unlike Australians who are not taxed on similar earnings.

Addy, who returned to Britain in 2017, welcomed the Federal Court upholding her appeal. "In my opinion it is a slippery slope. It just makes sense, no matter where you come from, that if you are doing the same work then you have to be paid the same money."

Assistant Treasurer Michael Sukkar said it would be a matter for the Commissioner of Taxation to determine whether he would appeal the decision. "The government will await the finalisation of any legal process before considering if any policy response is needed," he said.