Individuals – Australian Tax - Living in Australia - Working Holiday Visa
The ATO considers that most people who come to Australia on a temporary working visa or visit are generally not considered Australian tax residents.
This is because, consistent with their visa requirements, it is not the intention to stay in Australia, but only intend to have a holiday while working some of the time.
Should you travel to Australia as a working holiday maker either on a 417 (working holiday) or a 462 (work & holiday) visa, the first $37,000 of your income is taxed at 15% and the balance is taxed at ordinary rates. This is regardless of residency status.
As a foreign tax resident working in Australia you are still required to lodge an Australian Tax Return with the Australian Taxation Office (ATO) to report your Australian sourced income.
Australian Federal Court backs 2019 ruling the controversial ‘backpacker tax’ invalid
Following an appeal by the ATO, the Australian High Court has (November 2021) reaffirmed a court ruling from October 2019 which stated that the ‘Backpacker Tax’ cannot be levied on citizens from certain foreign countries, namely UK, the US, Germany, Finland, Chile, Japan, Norway and Turkey.
What does this ruling mean for Backpackers?
If you visited Australia as a working holidaymaker between 2017 – 2020, it’s highly likely that you will be entitled to a significant tax refund as a result of this case!
Put simply, if you think you have been affected by the Backpacker Tax, you should contact GM Tax.
Backpackers from other countries:
We anticipate that there will be further developments in this case which will affect backpackers from other countries.
The Australian tax year runs from 1st July to 30th June.
You will need to apply for a tax file number in order to lodge an Australian Tax Return.
We at GM Tax provide fixed fee quotes for all tax returns.
If you are moving to Australia or are already living in Australia or departing Australia and would like a fixed fee proposal from a firm of UK & Australian tax advisors that understands the issues affecting new arrivals to Australia or if you are leaving Australia please complete our online enquiry via our home page or by calling a GM Tax office close to you.
GM Tax also offers the following services:
- tax planning advice and guidance with regards to your Australian residency status or change in visa status.
- Preparation of Australian tax returns, with all returns submitted to the ATO electronically.
- Advice on the tax position where a property in Australia is being let while a taxpayer is living overseas.
- Impact of ceasing to be an Australian Tax Resident and capital gains tax deeming provisions.
- Assistance to ensure Australian sourced income of those who are non residents of Australia is properly taxed and is not taxed twice, or double taxed.
- HECS reporting obligations as a non-resident of Australia in receipt of foreign sourced income.
- This last point is particularly relevant to those who have Australian sourced income or capital gains which may also be subject to tax in the country in which the taxpayer is now resident.