According to the tax office in Down Under, though the Working Holiday Makers (WHMs) in the country will have their tax position duly evaluated as per their individual circumstances they ought to be taxed only on what they eventually receive in the nation.
With the tax arrangement for the WHMs likely to undergo a change from the month of January next year, there is widespread fear that the new arrangement is discouraging young individuals. At present, legislation is reportedly before the Australian Parliament, and it denotes that they will not any longer obtain the 18,200 dollar tax free stipend even as they will give 19% tax from their first day of working.
The change also signifies that they shell-out the new 19 cents per dollar taken home rate up to the earnings of 37,000, dollars when ordinary tax levels then become effective. Despite the fact that the administration was keen to tax the backpackers at 32.5%, a furious reaction led to it being cut down to 19% and this is more in sync with other nations, like the neighboring New Zealand, for instance.
As per the incumbent Australian Tax Commissioner Chris Jordan, the amount of tax that a WHM may give will depend on their standing or residency for tax objects, and the concerned officials consider the individual situations that are applicable to every WHM.
He elucidated that the truth is, what one finds is that the maximum number of the WHMs are temporary. They move around even while they do not set up nationality in the nation for the duration of their stay. Hence, as a non-resident for tax objects, they will be taxed only on their Australian sourced earnings, like the money they get working in Oz, and they will begin giving tax on the first dollar of the revenue they make.
He also reportedly indicated that any WHM, who is hesitant, can refer to the tax office for guidance and the office regards that those who are moving around and doing a job at the various places around Down Under will be non-residents for tax objects.
The Tax Commissioner added that the department will assist the WHMs understand the nation’s self-assessment tax arrangement, so that they appropriately counsel their recruiters/firms of their residency standing and have correct tax withheld.
The department will also not leave any stone unturned and work to guarantee that the WHMs properly prepare their tax returns. The same will comprise working with the tax agents to ensure that their guidance is consistent with the ATO opinion and some checking of returns.
Jordon also reportedly indicated that the residency position turns on the situations applying to every individual WHM. For instance, in case the WHMs do establish citizenship for tax objects, they will be duly taxed on their global income from each and every source comprising the salaries from working in Oz.