Tax residency – Working holiday maker

The Federal Court recently decided a tax residency issue in relation to a working holiday maker that visited Australia from the USA.  The taxpayer argued that she was a resident of Australia.  The case demonstrates the difficulty that tax agents often have with deciding whether an individual is a tax resident of Australia.

Website Comments

  1. Michael H
    Reply

    I wonder whether it is a contradiction to the Double Tax Agreements’ rules that specifically prohibit any tax discrimination of the residents of the countries under the DFAs.

    • John Jeffreys, Tax Counsel, Tax and Super Australia
      Reply

      Hi Michael. Thanks for your comment. You may have also seen the recent case of Addy v Commissioner of Taxation where the discrimination issue was specifically referred to. This case was lost by the Commissioner due to it being concluded that the Australia/UK Double Tax Agreement contained an anti-discrimination clause. This meant that the working holiday maker rates could not be applied to a British Citizen in the situation of the taxpayer. However, only a limited number of Australia’s DTA’s have a such a non-discrimination clause.

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