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Australia's 'backpacker tax' ruled invalid by court | Australia's 'backpacker tax' ruled invalid by court |
(32 minutes later) | |
Australia has used a so-called "backpacker tax" to illegally tax foreign workers from eight countries, according to a landmark ruling. | Australia has used a so-called "backpacker tax" to illegally tax foreign workers from eight countries, according to a landmark ruling. |
In 2017, the government imposed a controversial 15% tax rate on two visa categories for working holiday-makers. | In 2017, the government imposed a controversial 15% tax rate on two visa categories for working holiday-makers. |
But a court on Wednesday found the levy was in breach of existing treaties with the UK, US, Germany, Finland, Chile, Japan, Norway and Turkey. | But a court on Wednesday found the levy was in breach of existing treaties with the UK, US, Germany, Finland, Chile, Japan, Norway and Turkey. |
Tens of thousands of foreign nationals may be owed money, local media said. | Tens of thousands of foreign nationals may be owed money, local media said. |
The Australian Tax Office said it was considering whether to appeal against the ruling. | The Australian Tax Office said it was considering whether to appeal against the ruling. |
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 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. |
About 150,000 foreigners travel to Australia every year on working holiday visas, with many finding work in the farming and hospitality industries. | About 150,000 foreigners travel to Australia every year on working holiday visas, with many finding work in the farming and hospitality industries. |
What did the court find? | What did the court find? |
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. | 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. |
This was due to treaties which required Australia to tax those foreign nationals in the same way as local workers. | This was due to treaties which required Australia to tax those foreign nationals in the same way as local workers. |
Unlike foreign workers in Australia, locals do not pay any tax until their yearly income exceeds A$18,200 (£15,700; $23,400). | Unlike foreign workers in Australia, locals do not pay any tax until their yearly income exceeds A$18,200 (£15,700; $23,400). |
In his ruling, Justice John Logan described the tax as "a disguised form of discrimination based on nationality". | In his ruling, Justice John Logan described the tax as "a disguised form of discrimination based on nationality". |
It may force the government to repay hundreds of millions of dollars in total, local media reported. | It may force the government to repay hundreds of millions of dollars in total, local media reported. |
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