Big Shoes, a German incorporated company listed on the German Stock Exchange, is in the business of manufacturing shoes. It plans to enter the Australian market and asks for your advice on the following alternative structures:

1. It will appoint an unrelated company incorporated in Australia as its distributor to handle the sales here. It will sell shoes to the distributor who in turn sells them to the customers.

2. It will grant a license to an unrelated company incorporated in Australia to produce and sell the shoes. It will charge royalties on the sales of the shoes. It will send employees who are German tax residents to Australia to train the employees of the Australian company, and supervise the production. Its employees will typically stay in Australia for six months to a year.

Analyse the Australian income tax implications of the company and its employees under both domestic tax law and the AustraliaGermany tax treaty