Government’s backpacker tax challenged in legal action

THE validity of the Federal Government’s Backpacker Tax has been brought into question following legal action started on behalf of working holidaymakers from eight countries, including the United Kingdom and United States.

The action against the Federal Government has been initiated by Taxback.com, an international tax accounting firm that provides global tax refund and tax return services. Separate to the action, Taxback.com has also agreed to enter into dialogue with the Australian Government following constructive correspondence with the Australian Government Solicitor in an effort to resolve the issue outside court.

The company argues that the Backpacker Tax introduced in January 2017 contravenes non-discrimination clauses built into tax treaties that Australia has signed with eight countries: the UK, the US, Germany, Finland, Chile, Japan, Norway and Turkey.

These clauses prohibit unequal tax treatment of citizens from these countries, including working holidaymakers, compared with Australians.

International tax treaties signed by Australia override domestic tax laws.

Taxback.com commercial director Eileen Devereux said the action was an important step to protect foreign workers and Australia’s reputation as a working holiday destination.

“It is our preference to resolve this issue through a mediated solution and we look forward to collaborating on this,” she said.