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Income Tax : POEM Guidelines have been recently finalised only on 24th January, 2017, whereas the POEM provisions are already applicable w.e.f....
Income Tax : in a case where a foreign company is said to be resident in India on account of its Place of Effective Management (hereinafter ref...
Income Tax : Para 7 of POEM guidelines provides that the place of effective management in case of a company engaged in active business outside ...
Income Tax : CBDT invites comments and suggestions on the Draft Notification in respect of foreign company said to be resident in India under S...
Income Tax : Press Release on POEM guidelines dated 24th January, 2017 has, inter alia, stated that the POEM guidelines shall not apply to a c...
Income Tax : Section 6(3) of the Income-tax Act, 1961 (the Act), prior to its amendment by the Finance Act, 2015, provided that a company is sa...
in a case where a foreign company is said to be resident in India on account of its Place of Effective Management (hereinafter referred to as PoEM) being in India under sub-section (3) of section 6 of the Act in any previous year and such foreign company has not been resident in India in any of the previous years preceding the said previous year
Prior to the introduction of the concept of POEM, a Company was said to be resident in India in any previous year if it was an Indian company or during that year, the control and management of its affairs was situated wholly in India. The Finance Act, 2015 amended the above provision so as to provide that a Company would be resident in India in any previous year if it is an Indian company or its Place of Effective Management (POEM) in that year is in India.
POEM Guidelines have been recently finalised only on 24th January, 2017, whereas the POEM provisions are already applicable w.e.f. 1st April 2016 (applicable from AY 2017-18 and onwards)
Para 7 of POEM guidelines provides that the place of effective management in case of a company engaged in active business outside India (ABOI) shall be presumed to be outside India if the majority meetings of the board of directors (BOD) of the company are held outside India.
The increase in globalization and technological advancement has resulted in the international expansion of several multinational and Indian corporations. Over the years, these corporations have used their global presence to enter low-tax jurisdictions, primarily to reduce the overall effective tax costs.
Place of Effective Management (PoEM) has been one of the most deliberated aspects under the Indian Income Tax regime since its introduction vide Finance Act, 2015, especially for Indian transnational groups.
CBDT invites comments and suggestions on the Draft Notification in respect of foreign company said to be resident in India under Section 115JH of the Income-tax Act, 1961
Press Release on POEM guidelines dated 24th January, 2017 has, inter alia, stated that the POEM guidelines shall not apply to a company having turnover or gross receipts of Rs. 50 crores or less in a financial year .
A foreign company would be resident in India in any previous year if its POEM in that year is in India. There were no guidelines to determine POEM under Act. Hence, now CBDT has issued a circular No. 6 of 2017, dated 24.01.2017 under subject Guiding Principles for determination of Place of Effective Management (POEM) of a Company in this regard.
Section 6(3) of the Income-tax Act, 1961 (the Act), prior to its amendment by the Finance Act, 2015, provided that a company is said to be resident in India in any previous year, if it is an Indian company or if during that year, the control and management of its affairs is situated wholly in India.
