The recent decision in Addy v Commissioner of Taxation [2019] FCA 1768 continues to stir up the tax practitioner community. It found that a taxpayer was not subject to the “backpackers tax” basically due to the operation of an article of non-discrimination (Art 25[1]) in the Australia-UK Double Taxation Agreement.

In the interim since the decision was handed down, the ATO has issued a statement setting out the Commissioner’s views — stating at the outset that the ATO is still considering this decision and has not yet decided whether an appeal is appropriate.

The ATO notes that the decision only applies to working holiday makers from seven countries — Britain, Chile, Finland, Germany, Japan, Norway and Turkey. By ATO estimates, around 36% of the total number of people issued with working holiday maker visas in 2018 were from those countries. It also points out that the decision further only affects those that are “residents of Australia for tax purposes”.

Were no appeal to be lodged by the ATO, it advises that any affected taxpayer who may be entitled to a refund can object to their assessments to have their tax residency considered. “However, this would be determined on a case-by-case basis with regard to their individual circumstances.” Readmore