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Re: Working holiday visa holder tax residency

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Newbie

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Replies 3

Hi,

Should working holiday visa holders be treated as non-resident in tax return even though they meet residency test?

 

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Community Support

Replies 2

Hi @skstaxagent,

 

A working holiday maker (WHM) does not have to be reported a non-resident on their tax return just because of their visa type. 

 

Anyone can be a resident for tax if a WHM.

 

Keep in mind that residency status does not change the tax rate for income earned under a WHM visa.

 

3 REPLIES 3
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Most helpful response

Community Support

Replies 2

Hi @skstaxagent,

 

A working holiday maker (WHM) does not have to be reported a non-resident on their tax return just because of their visa type. 

 

Anyone can be a resident for tax if a WHM.

 

Keep in mind that residency status does not change the tax rate for income earned under a WHM visa.

 

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Newbie

Replies 1

Thanks Blake,

But ATO cancelled a client's original tax return as tax residentm, and then changed to non-resident without notification to client and tax agent.

Initially, we as a tax agen ticked tax resident in tax return after checked residency with client.

ATO individual tax adviser did not give proper answer in phone conversation.

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Community Support

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Hi @skstaxagent,

 

If we've already made a decision, you and the client will need to object to our decision to change the answer.

 

The reason we likely changed the reported residency is because, as per the resident for tax if a WHM page:

                                                             

Most people who come to Australia for a working holiday or visit are not Australian residents. This includes people on 417 or 462 visas (backpackers). This is because most backpackers, consistent with their visa requirements, do not intend to stay in Australia, but only intend to have a holiday while working some of the time.

 

This next part is going to be important for your objection:

 

Generally, unless you meet the 183 day rule and have proven that you intend to remain in Australia long term or permanently, you will not be considered a resident for tax purposes.

 

In your objection, the client will need to prove they meet this requirement.