Australia Federal Court Issues Tax Ruling Explaining Taxation of Working Holiday Income

The Australian Federal Court Aug. 6 issued a taxation ruling on the income taxation of a working holiday maker (WHM). A U.K. citizen with an Australian working holiday visa was taxed on income earned in Australia under the Income Tax Rates Act. The taxpayer requested to apply the tax-free threshold benefit for being an Australian tax resident, claiming that the WHM rate infringed on the 183-day rule under the 2003 Australia-U.K. DTA, and discriminated against her based on nationality. The tax commissioner appealed, claiming that the 183-day rule didn’t apply and that the taxpayer wasn’t entitled to the tax-free threshold ...