The Australian government has launched a review into tax issues affecting working holiday maker visa holders, including details on the proposed ‘backpacker tax’
The review was announced by minister for agriculture and water resources, Barnaby joyce, into the issues surrounding the supply and taxation for those travelling to Australia and taking up working holiday visas.
There is particular interest in the ‘backpacker tax’ which is a tax rate of 32.5% for non-resident 417 and 462 visa holders.
Previously working holiday makers were considered residents for tax purposes with no taxable income on the first A$18,200 earned.
In the 2015/16 federal budget it was announced that changes were to be made to consider working holiday makers as non-residents however, there is a worry that this would cause a disincentive for backpackers to take on roles that are not being taken by Australian workers.
The measure was set to be in force by July but the government announced in May that it would be delayed for six months.
Although holiday makers provide a source of labour it is also important that they pay a fair level of tax, states the document.
The review will consider: relative international competitiveness, visa labour needs of the agricultural and tourism sectors, relevant unemployment policies, tax treatments for visa holders and protection for vulnerable workers.
The deadline for public submissions is 2 September 2016.
The working holiday maker visa review summary sheet is here.
