Check residency for working holiday makers

ATO are receiving a large number of tax returns with an incorrect residency status for working holiday makers.

ATO encourage taxpayers understand whether they are a resident for tax purposes, and check they have completed their status correctly before lodging their tax returns.

Let them know that most working holiday makers on a 417 or 462 visa are not Australian residents due to their pattern of working and holidaying while in Australia.

Advise them that the tax rates for working holiday makers on a 417 or 462 visa changed and two different rates apply for their 2017 tax returns.

Taxpayers must pay:

• the marginal rate of tax for any income they earned up to 31 December 2016. This will be at foreign resident rates for most of your clients.
• 15% tax on income earned from 1 January 2017 up to $37,000 after which normal tax rates apply

ATO will review residency when processing taxpayers' tax returns. If it is inconsistent with other information we hold, ATO will adjust the residency status before issuing their notice of assessment.

Source: 
Are you an Australian residency for tax purposes
Working holiday makers