Image source, Getty Images
Image caption Australia implemented its “backpacker taxes” in 2017

In a case that could have important implications for all travellers, a British woman won the legal fight against Australia’s “backpacker” tax.

Catherine Addy claimed that she was unfairly taxed because of the wages she earned as a Sydney waitress.

According to her, the tax that was levied in her year discriminated against her based on her nationality.

Others backpackers have also been affected by this rule and are waiting for the Australian Supreme Court to make a decision.

Now they may be able ask Australian authorities for a review of their tax assessments.

The ruling pertains to the working holiday visa (also known as 417), which was offered to foreigners between 18 and 31 years of age.

They are subject to a 15% tax on income up to A$37,000 (£20,200; $27,500), which is paid from the first dollar they earn.

It is much higher than the rate paid by Australians who have a tax-free threshold at A$18,200.

Lawyers for Ms Addy claimed that these rules conflict with an Australia bilateral “double tax” agreement. They argued that citizens of these countries should be taxed as Australians.

On Wednesday, the High Court of Australia ruled that Ms Addy received a burdensome taxation because of her nationality. “Yes,” is the short answer.

According to the Australian Taxation Office, there is no discrimination on the basis of nationality.

The tax had been stated to be designed to assist backpackers in avoiding higher tax rates imposed by foreign workers.

Between January 2017 to May 2017, Ms. Addy was a waitress at two Sydney bars, earning A$26.576.

The court submitted that she paid A$3,986 in tax, while an Australian with the same income would have had to pay $1.591.

Simon Atkinson, BBC Reporter

Source: BBC.com

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