- “Many people are unware that non-compliance with filing obligations could spell trouble for future travel plans”
- Oz tax year ended on June 30th
Tax refund specialists Taxback.com are calling on anyone who has lived & worked in Australia in the last 10 years to check their tax filing obligations and tax refund entitlements.
In 2017 significant changes were introduced by the Australian Government (see Appendix 1), which mean that Irish working holiday visa holders now have to pay higher rates of tax on earnings.
The tax experts say that although changes have had an impact on refund entitlements, their experience is that people who have left Irish shores to work in Australia in the last 10 years, are owed hundreds of thousands in Australian tax refunds. Taxback.com say their average Australian tax refund is $2,600.
Taxback.com have launched Bullsh*t-Free Guide to Australian Working Holiday Taxes, an easy-to-access, easy-to-use tax guide for working holidaymakers either in Australia or who have returned home to Ireland. This resource enables all backpackers to understand how the Australian tax system works, what reliefs are available to them and how they can go about getting them.
Eileen Devereux, Commercial Director at www.taxback.com explained,
“Australia’s tax year ends on June 30th, at which point anyone who has worked in Australia the previous year needs to file a return. In light of this, we thought that this would be an opportune time to remind people not only of their filing obligations, but of their potential refund entitlements.”
There are 4 primary cases in which people could find themselves getting a cheque from Australian revenue:
- The recent tax changes were not retrospectively introduced, meaning anyone who worked in Australia in the 9 years prior to the changes (2008-2016), and has since returned home could still be eligible for tax rebates based on the old regime and the historic rates of tax.
- Those who worked in Oz anytime between 2008 – 2016 could also be eligible for a superannuation refund (See Appendix 2) – approximately 62% of the total fund accumulated.
- Anyone who worked after January 2017 could still be eligible for a refund for a myriad of reasons such as overpayment of tax, refund of emergency tax, not including relevant deductions etc.
- Post January 2017 workers could also be eligible for a superannuation refund – albeit at a lower rate – approximately 35% of the total fund accumulated.
Taxback.com say the June 30th date is significant because many Irish workers are not aware that they are legally obliged to file a tax return to Australian tax authorities once the tax year ends.
Ms. Devereux advised, “We have found that people often leave Australia having worked there for a year or two and fail to file a return because they simply don’t know they have to. However, non- compliance could impact their visa eligibility should they wish to go back in the future.”
Under the previous system, working holidaymakers who stayed in Australia for 6 months or more would be considered as ‘residents’ for tax purposes. This meant that they could claim a tax-free threshold of up to $18,200, and pay tax of just 19% on income earned between $18,201 and $37,000 – leaving large tax refunds available to Irish workers Down Under.
However, as of 1 January 2017, working holidaymakers can no longer be consider ‘residents’ in Australia for tax purposes, regardless of how much time they have spent down under and so must now pay tax at 15% on every dollar they earn.
Superannuation funds (which are referred to as ‘supers’ in Australia) were introduced by the Australian Government as a way of saving for retirement.
Workers who are over 18 and earn more than $450 per month before tax must have 9.5% of the value of their ordinary time earnings paid into a super fund by their employer on their behalf.
Anyone on temporary visa in Australia (except subclasses 405 and 410) and who leaves the country can claim back their superannuation.
The refund is called a ‘Departing Australia Superannuation Payment’ (DASP) and workers can only claim it if their visa has expired and they have left Australia.