By Gabriel Princewill-
Australia may have to repay hundreds of millions of dollars after a court ruled that it illegally taxed foreign workers from eight countries.
A 15 % tax rate imposed by the Australian government in 2017 on two visa categories for working holiday-makers was today ruled unlawful by an Australian Court in a landmark ruling on Wednesday.
A Brisbane court ruled the levy – dubbed the “backpacker tax” – cannot be applied to a British woman due to a double taxation treaty between Australia and the UK.
AD: Capeesh Restaurant
Australian locals do not pay any tax until their yearly income exceeds A$18,200 (£15,700; $23,400), unlike foreign workers who live there. This practise is discriminatory, the Federal Court ruled. Justice John Logan said it was a disguised form of discrimination based on nationality.
A source from BBC Australia who alerted us to the news, told The Eye Of Media.Com that the ruling could have ”huge financial ramifications on the Australian government, and enrich many of those affected if they lodge legal suits”.
Although the Australian Tax Office is considering appealing the decision, experts in Australia believe the chances of a successful appeal are slim, making even the process very unlikely.
AD: Oysterian Sea Food Restaurant And Bar
The court said the levy was in breach of existing treaties with the UK, US, Germany, Finland, Chile, Japan, Norway and Turkey. The Australian Tax Office is considering whether to appeal against the ruling. The ruling means several Brits may be able to sue for compensation after effectively being duped by the Australian authorities.
Although the Australian Tax Office is considering appealing the decision, experts in Australia believe the chances of a successful appeal are slim, making even the process very unlikely. Our source said:
”the treaties are carved in stone and cannot be construed in any way that will invalidate this ruling. It is pretty much the case that foreigners in Australia have been excessively taxed. It is now important for all citizens of those eight countries to be aware that they are entitled to the same tax as Australian citizens”.
The levy was challenged by an international tax company on behalf of a British tourist, Catherine Addy, who worked as a waitress in Sydney in 2016.
The Federal Court of Australia said the tax could not be applied to citizens of those eight countries who had been employed on category 417 or 462 visas. Existing treaties required Australia to tax those foreign nationals in the same way as local workers.
AD: Heritage And Restaurant Lounge Bar