The Federal Court has ruled that the backpacker tax cannot be applied to citizens of eight countries who are Australian residents.

The decision applies to Working Holiday Makers from the United Kingdom, the United States, Germany, Finland, Chile, Japan, Norway, and Turkey who are Australian residents for taxation purposes.

Following the decision, AUSVEG CEO James Whiteside said that while the decision could have some positive implications for workers in the horticulture industry, it was important to note that this decision did not apply to all backpackers.

“This decision will affect people from these eight countries who are on Working Holiday Making visas who are Australian residents for taxation purposes, so it is important for these workers and their employers to review their residency status to determine whether this affects them,” said Mr Whiteside.

The backpacker tax has been a vexatious issue for the industry since it was implemented in 2016. At the time industry argued that a backpacker tax, which was originally set to be at 32.5 per cent but settled at 15 per cent, would deter backpackers from entering the country and heavily impact Australian vegetable and potato growers. In 2012-13, Australia had more than 258,000 Working Holiday Makers enter the country on 417 and 462 visas – now that figure is down to just over 209,000.

AUSVEG is awaiting further advice from the Australian Taxation Office.