Working Holiday Maker Changes 2022 onwards
Key Changes:
On 3 November 2021, the High Court handed down its decision in Addy vs Commissioner of Taxation in favour of the taxpayer.
The Court found that, considering the individual facts of the case, the working holiday maker (WHM) in question was a resident for tax purposes and that the non-discrimination article (NDA) in the relevant Double Tax Agreement (DTA) between Australia and the UK meant that the taxpayer was entitled to be taxed under the ordinary resident tax rates instead of at the 15 per cent rate that currently applies to WHMs.
This decision only applies to some WHMs from Chile, Finland, Germany, Japan, Norway, Turkey and the United Kingdom. It does not impact WHMs from other countries. However, it is possible that the number of countries affected will increase over time as more DTAs are negotiated and as more countries are accepted into the WHM visa system/rules.
No change to forms. There may be a potential change to the tax estimate.
WHM income – need to specify home country. HandiTax will apply the ruling.
Example:
Item 1 - Salary or wages
Enter the Gross Payment type code 'H' or Blank.
H This indicates whether the income reported by the individual was earned while on a working holiday maker visa.
A4 - Working holiday maker net income
Working holiday maker home country (F5 for a list).
