Irish firm challenges Australia backpack tax
An Irish company that provides global tax refund services has taken legal action against the validity of the Australian federal government's backpacker tax.
The action by Taxback.com is being taken on behalf of working holidaymakers from eight countries, including the UK and the US.
Irish backpackers are affected by the tax, however they are not specifically included in the action.
The company is arguing the backpacker tax, which was introduced at the start of this year and imposes a higher rate of tax on foreigners who enter Australia on a 417 or 462 working holiday visa, 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.
"Our challenge is with respect to eight other nationalities who have double taxation agreements, which include non-discrimination clause, which Ireland does not have," Eileen Devereux, commercial director at Taxback.com, said.
"We would be hopeful that if the case were successful... that the Australian government would extend this to the additional nationalities who avail of the 417 and 462 visa programmes."