Mountain Company is a company incorporated in the United States. It employs salespeople who live in Canada but does not have an office or any establishment bearing the company name in Canada. The salespeople visit Canadian customers, who then order from Mountain Company and receive goods directly from the United States. Which of the following best describes the tax status in Canada of Mountain Company?

Mountain Company is subject to tax only on its Canadian sales because the location of company employees in Canada implies that there is a permanent establishment.

Mountain Company is subject to a withholding tax under Part XIII of the Income Tax Act on its gross revenue in Canada.

Mountain Company is not taxable in Canada, because it does not have a permanent establishment in Canada.

Mountain Company is subject to a withholding tax under Part XIII of the Income Tax Act on its net income earned in Canada