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CIMAPRA19-F01-1 Exam - Topic 1 Question 117 Discussion

XY is an entity incorporated in Country B but operates in several countries. Monthly management meetings to decide on strategic matters take place in Country A, where the majority of its production happens. XY sells most of its goods to Country C.In accordance with the Organization for Economic Co-operation and Development (OECD) rules on corporate residence which of the following statements is true?
C) XY is resident in Country A because this is the country of its effective management.
A) XY is resident in Country B because this is the country of its incorporation.
B) XY is resident in Country C because this is the country where XY generates most of its revenue.
D) XY is resident in Country A because this is the country where XY undertakes most of its production.

CIMAPRA19-F01-1 Exam - Topic 1 Question 117 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 117
Topic #: 1
[All CIMAPRA19-F01-1 Questions]

XY is an entity incorporated in Country B but operates in several countries. Monthly management meetings to decide on strategic matters take place in Country A, where the majority of its production happens. XY sells most of its goods to Country C.

In accordance with the Organization for Economic Co-operation and Development (OECD) rules on corporate residence which of the following statements is true?

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Suggested Answer: C

by Ivory at Oct 30, 2025, 09:04 AM

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Trinidad
5 months ago
But revenue in C is important! B has a point.
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Lynsey
5 months ago
D could be valid since production is in Country A.
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Johnetta
5 months ago
I feel A makes sense too. Incorporation is key.
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Tony
6 months ago
Not sure about this, seems complicated with all those countries involved.
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Layla
6 months ago
Wait, how can it be A just because of production?
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Dorinda
6 months ago
Definitely think it's C, effective management matters!
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Ngoc
6 months ago
XY is incorporated in Country B.
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Nicolette
6 months ago
Haha, I bet the accountants at XY are really scratching their heads over this one. C is the way to go!
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Nakita
6 months ago
I agree with C. The question clearly states that the management meetings take place in Country A.
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Elli
7 months ago
Definitely C. The OECD rules focus on the place of effective management, not just incorporation or revenue.
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Olen
7 months ago
I thought production location mattered, but I can't recall if that alone makes D true. This is tricky!
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Dannette
7 months ago
I practiced a similar question where revenue generation was key, but I think that was more about taxation, so I'm leaning towards C again.
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Sherill
7 months ago
I think C is the right answer. Effective management matters.
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Leslee
7 months ago
C) XY is resident in Country A because this is the country of its effective management.
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Elenore
8 months ago
Country C makes sense since that's where the sales are!
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Marcelle
8 months ago
I'm not entirely sure, but I feel like the incorporation country usually holds weight, which makes A a contender too.
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Nathan
8 months ago
I remember discussing how corporate residence is usually determined by where effective management occurs, so I think C might be correct.
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Werner
8 months ago
This is a classic corporate tax residency question. I'll make sure to carefully apply the OECD rules and consider all the relevant factors before selecting my answer.
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Jarvis
9 months ago
I've got a good feeling about option C. The question states that the monthly management meetings take place in Country A, so that seems to be the country of effective management.
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Nana
9 months ago
I'm a bit confused by the wording here. Is the question asking about the country of incorporation, revenue generation, production, or effective management? I'll need to re-read it a few times.
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Dana
9 months ago
Okay, let's think this through step-by-step. The key seems to be identifying the country of effective management, which is where the strategic decisions are made.
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Phil
9 months ago
Hmm, this is a tricky one. I'll need to carefully review the OECD rules on corporate residence to determine the right answer.
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Alida
4 months ago
I lean towards C as well, management is crucial.
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Anglea
4 months ago
Don't forget about revenue in C, could be B.
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Deja
4 months ago
A is solid since it's incorporated there.
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Leila
4 months ago
But D makes sense too, production location matters.
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Hubert
7 months ago
I think it might be C. Effective management is key.
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