Problem
Melchor is a senior executive of an Australian brewing company. The company decides to expand into the European market, and Melchor is expected to be posted to Germany to take responsibility. Melchor is expected to live in Germany for at least the next 3 years, and therefore decides to lease a few apartments in different cities of Germany. Melchor has a family in Sydney, but they do not accompany him as his children are in their senior years of secondary school. Melchor travels back to Sydney to see his family as often as possible, with some years for only 30 days and other years, for 150 days. Melchor also continues to maintain his joint bank account in Australia with his spouse.
Consider whether Melchor is an Australian tax resident in these facts and the source of interest income from his bank account in Australia. Please support your answer with relevant legislation and case law.
Criteria 1: Identifies the relevant legal issues, sub-issues in the problem question
Demonstrates an understanding of numerous relevant sources of taxation law applicable to the scenario described - that is, explaining and interpreting a number of relevant legislation, case law and taxation rulings (e.g which cases you found relevant, which tax ruling, which section of the legislation?).
Clearly articulates all the relevant facts, legal issues and sub-issues in the scenario (e.g where is the place of abode, how long they have stayed in a country, what is the taxpayer's intention, where is the taxpayer's family and social ties etc?; Are there sufficient ties to demonstrate a connection to Australia?)
Criteria 2: Analyse the scenario and applies the relevant taxation laws to support a particular conclusion
Presents logical, informed, and reasoned argument(s) that critically and correctly applies taxation law to all identified issues to support a particular conclusion (e.g a place of abode overseas is an indication that they are not a tax resident of Australia or a temporary intention to visit an overseas country is an indication that they are a tax resident of Australia)
Criteria 3: Depth of analysis to support a particular conclusion
Able to compare and contrast all the relevant case law to the problem question, drawing on similarities and differences.
(e.g in the case of "X", the taxpayer had a place of abode in the Middle East, and this is similar to our facts because... or in the case of "Y", the taxpayer had an intention to stay overseas indefinitely and this is different to our facts because....)