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The ATO has appealed to the Full Federal Court against the Federal Court decision in Addy v FC of T (see Australian Tax Adviser, November 2019). This decision relates to whether a working holiday maker was subject to the 15% tax rate applying to working holiday maker income or at normal Australian resident rates, including the tax-free threshold.
The ATO will continue to administer the working holiday maker income tax rates in line with the current practice until the appeals process is exhausted.
The impact of the decision and any appeal is limited to working holiday makers from Chile, Finland, Germany, Japan, Norway, Turkey and the United Kingdom, who also qualify as residents of Australia for tax purposes.
The ATO has encouraged working holiday makers who may potentially be entitled to a refund to wait until the appeal has been decided before seeking a refund, amending their return or objecting. They will then have the opportunity to lodge an amendment request with the Commissioner at a later time. The Commissioner will give favourable consideration to any requests to extend the time for lodging objections if a taxpayer’s amendment period has expired.
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