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In the 2015-16 Federal Budget, the government announced that it will change the tax residency rules for most people who are temporarily in Australia for a working holiday.
These people will be treated as non-residents for tax purposes, regardless of how long they are here. They will not be able to access the tax-free threshold and will be taxed at the second marginal rate (currently 32.5%) from their first dollar of income up to $80,000.
The change will take effect from 1 July 2016.
Legislation for this measure has not yet been drafted.
