Choose the correct answer.

A$.$

Mystic Ltd$.$ was incorporated prior to April$27,1965,$ but since directors meetings were held in Canada until May$1999,$ it is deemed a resident of Canada. Since the CMC is in the$$ U$.$S$.,$ however, it is also a factual resident of the U$.$S$.$ Given this dual$$ residency, the$$ Canada$/$U$.$S$.$ tax treaty considers a corporation to be a resident of the country where its CMC$$ resides, so it would only be subject to tax in Canada on Canadian source income.

B$.$

Mystic Ltd$.$ was incorporated prior to April$27,1965,$ but since directors meetings were held in Canada until May$1999,$ it is deemed a resident of Canada. Since the CMC is in the$$ U$.$S$.,$ however, it is also a factual resident of the U$.$S$.$ Given this dual$$ residency, the$$ Canada$/$U$.$S$.$ tax treaty considers a corporation to be a resident of the country in which it was$$ incorporated, so its worldwide income would be subject to tax in Canada.

C$.$

Mystic Ltd$.$ was incorporated prior to April$27,1965,$ and since directors meetings were not held in Canada after May$1999,$ it is not a resident of Canada.$$ So$,$ it would only be taxed on Canadian source income.

D$.$

Mystic Ltd$.$ was incorporated prior to April$27,1965,$ but since directors meetings were held in Canada until May$1999,$ it is deemed a resident of Canada. Even though the CMC is in the$$ U$.$S$.,$ it does not have U$.$S$.$ residency. This means that its worldwide income would be subject to tax in Canada.