Sea Water Ltd manufactures flavoured water drinks at its Ashburton plant. After some market research in 2022 the company decided to sell its products in Australia. Initially, no Australian company will be established nor will the company lease any office space in Australia. The Australian venture will be carried on and managed from New Zealand by the company. The flavoured water drinks will be stored in a rented Sydney warehouse before being transported to various Australian retailers who have agreed to sell the product. A part-time sales representative has been appointed in Australia to represent the company. This person represents many different New Zealand companies in Australia on a commission basis.

Required:

(a) Sea Water Ltd seeks your advice on the taxation implications (if any) of profits derived from its Australian operations. Explain your answer. Your answer should refer to the Australia-New Zealand Double Tax Agreement.

(b) Would your advice in (a) differ if, rather than using a part-time sales representative (agent) in Australia, a full-time person (Leonardo), an Australian resident, is employed by Sea Water Ltd to represent the company in Australia. Leonardo lives in Sydney. Explain your answer.

(c) Would your advice in (a) differ if Sea Water Ltd leased an office in Sydney from which to manage its Australian operations? Explain your answer.

State any assumptions you make.