Happy Holidays Pty Ltd is a company incorporated in China. Happy Holidays Pty Ltds business involves providing tourist holiday packages in China. Happy Holidays Pty Ltd does not provide any holidays in Australia, but the majority of its contracts are entered into with customers in Australia. James Chen, an Australian tax resident, owns all the shares in Happy Holidays Pty Ltd. The directors of Happy Holidays Pty Ltd regularly meet in Brisbane, Australia, where the power of management is exercised. In relation to the above facts, which one of the following statements is the most correct?

Select one:

1. As Happy Holidays Pty Ltds controlling shareholder is an Australian tax resident, Happy Holidays Pty Ltd, for that reason alone, will be regarded as an Australian tax resident.

2. As Happy Holidays Pty Ltd is not incorporated in Australia, it is not possible for it to be a resident for Australian tax purposes.

3. As management and control of Happy Holidays Pty Ltd is exercised in Australia and the company carries on business in Australia, the company will be a resident for Australian taxation purposes.

4. As Happy Holidays Pty Ltd is not providing holidays in Australia, it could never be regarded as a resident for Australian taxation purposes

5. Happy Holidays Pty Ltd ordinarily resides in Australia and is therefore a resident for Australian taxation purposes.