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Australian Working Holiday 417 and 462 Visa Tax Delayed

Australian Working Holiday 417 and 462 Visa Tax Delayed

The Australian Federal Government has delayed the plan to tax the earnings of Australian working holiday visa holders on 417 and 462 visas by a period of six months. The tax rules earlier announced as a part of 2015 National Budget was opposed by farmers and tourism industry which made Australian immigration to review the plans. As per the commentators, the new tax rules levied on working holiday visa holders would harm the Australian global competitiveness. The new tax rules imposed from 1 st January 2017 would see ‘backpackers’ are forced to pay higher taxes when compared to local residents. The proposed changes on the tax rules have raised the concerns of the depletion of already depleted working holiday maker workforce. This would harm the seasonal businesses based on seasonal workers in the country.


Due to tax rules imposed on working holiday visa holders, a shortfall of 127,000 workers in the tourism industry over the next five years, is expected and Australia’s agriculture industry every year requires almost 40,000 working holiday maker workforce.


The ‘backpackers tax’ was scheduled to be introduced on 1 st July 2016, would have seen the travellers on Australian working holiday visas will be forced to pay 32.5% on every dollar earned by them, which earlier they don’t have to pay any tax on an income up to Aus$18,000. As per the new tax policy, the non –resident Australians whose annual income is Aus$40,000 approx. had to pay personal income tax of Aus$13,000, and leaving them with a net income of Aus$27,000. But under the current tax rules, the tax levied on Aus$40,000 approx. would be just Aus$4,547, and leaving a net income of Aus$35,453, with non-resident Australians. Though, currently the backpackers are paying less income tax but had to pay higher amounts than Aussies in other areas. For instance, backpackers have to pay taxes between 38 to 47 percent on withdrawal of their entire pension, which is known as superannuation in Australia, which is only 20 percent for Australian residents.


The working holidaymaker visa in Australia is very restrictive when compared to any other visa scheme.


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