Australia 'backpacker tax': British woman wins discrimination case

A British woman has won a legal battle against Australia's so-called "backpacker tax", in a ruling that may have implications for other travellers.

Catherine Addy argued she was unfairly taxed on pay she earned while working as a waitress in Sydney in 2017.

The tax - imposed that year - had discriminated against her on the basis of her nationality, she said.

Other backpackers affected by the same rule have been waiting on the decision by Australia's highest court.

They may now be able to ask Australian authorities to review their tax assessments.

The ruling relates to a working holiday visa - known as the 417 - offered to foreigners aged between 18 and 31.

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.

This is a higher rate than for Australians, who get a tax-free threshold of A$18,200.

Ms Addy's lawyers argued the rules were at odds with an international "double tax" agreement Australia has with Britain and several other nations. Citizens of those countries should be taxed like Australians, they said.

In a judgement delivered on Wednesday, the High Court of Australia said: "The question is whether that more burdensome taxation was imposed on Ms Addy owing to her nationality. The short answer is yes."

The Australian Taxation Office (ATO) had argued there was no discrimination based on nationality.

It had said the tax was designed to help backpackers avoid the higher rates of tax imposed on other foreign workers.

Ms Addy worked as a waitress in two Sydney pubs between January 2017 and May 2017 - earning A$26,576.

Court submissions said that while she had to pay tax of A$3,986, when an Australian on the same income would have paid $1,591.

Reporting by the BBC's Simon Atkinson