Leon is a German engineer. He was sent by his German employer to New Zealand to assist with a construction project. Leon arrived in New Zealand on 20 September 2019 and stayed in an apartment in central Auckland since then. His salary was paid into his German bank account. Leon expected to work in New Zealand for about 5 months. He hired a car and opened an account with BNZ Bank. He has received some interest income from BNZ Bank. Leon exercised every day to keep fit. He joined Les Mills’ membership. He also made some good friends in New Zealand and they often went tramping during the weekends. Leon went back to Germany on 21 December 2019 for a Christmas holiday with his family. He came into New Zealand again on18 January 2020 to continue working on the project. His wife and daughter came with him and they had a two-week trip around New Zealand. His wife and daughter went back to Germany after the trip. The project was progressing smoothly. Leon was very confident that they would complete the job in March 2020. He booked his air ticket for going back to Germany on 27 March 2020. However New Zealand entered into lockdown due to the COVID-19 pandemic. Germany also started to control the boarder entrance in March 2020. Leon was notified that the flight he booked was cancelled. Leon had to extend the rent period of the apartment and stayed there during the lockdown period. He could not find any flight that could take him home until 5 May 2020. He left for home on 5 May 2020 and will not come back to New Zealand in foreseeable future. Required: Please advise Leon about his tax liabilities regarding his New Zealand and worldwide income. 

Your advice should include the following: 

a) Briefly discuss the different tax consequences of being a resident or a non-resident for tax purposes. 

b). Identify the two rules to determine a person’s tax residence. 

c). Explain to Leon if he is liable to pay tax on his New Zealand and/or worldwide income for the year ended 31 March 2020. You should apply the two rules and the Inland Revenue’s publication regarding the COVID-19 impact on residency