Taxback challenges Australian Backpacker Tax

Business, Lifestyle | Mon 4 Dec | Author – Business & Finance tourism chany crystal

The international tax accounting firm makes claim against Australian Federal Government alleging that the Backpacker Tax breaches international tax treaties.

Taxback.com questions the validity of the tax following legal action on behalf of working holidaymakers from eight countries, including the UK and US.

The company has also agreed to enter dialogue with the Australian government following successful discussions with the Australian Government Solicitor in an effort to resolve the issue outside of court.

Taxback Commercial Director Eileen Devereux, said: “Travelling to Australia to work has long been a firm favourite of Irish workers and the tax changes have hit them hard financially. For the year ended 30 June 2016, 6,743 Irish nationals were issued a 417 visa for Australia.

“As our challenge stands at present, Irish backpackers would be unaffected. Our challenge is with respect to eight other nationalities who have double taxation agreements, which include non-discrimination clause, which Ireland does not have, however, we would be hopeful that if the case was successful for the eight countries in question that the Australian government would extend this to the additional nationalities who avail of the 417 and 462 visa programmes.”

Ms Devereaux went on to comment, “Having lodged our pre-action letter, we have been extremely encouraged by the willingness of the Australian government to come to the table for talks. It is our preference to resolve this issue through a mediated solution and we look forward to collaborating on this.” and “By discriminating against foreign workers the tax is fatally flawed.”

The eight countries that Australia signed with in relation to non-discrimination clauses built into the tax treaties are the UK, the US, Finland, Chile, Japan, Norway and Turkey.

Ms Devereaux said of the company’s position, “Our starting point is that by discriminating against foreign workers the tax is fatally flawed. The tax unfairly targets working holidaymakers. It runs in direct conflict with Australia’s obligations under multiple international tax agreements. In doing so, it also harms the reputation of Australia’s tourism sector.

“There’s no doubt that the Backpacker Tax has left a sour taste in the mouths of many visitors, and that can only harm Australia’s ability to attract visitors in future. This is why we are asking the Australian government to reconsider its position on this matter.”

Visitors from the eight countries account for approximately 50% of all visitors who come to Australia on 417 or 462 visa.