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Place of Effective Management (PoEM)

Posted on : 25 Dec 2019

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  • A PoEM is aimed at ensuring that sufficient economic activity takes place in a particular country and determining a foreign company’s residential status.
  • It also helps to assess if companies are setting up shell subsidiaries abroad to evade taxes.
  • In other words, it has been defined to mean a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made.
  • PoEM guidelines in India became applicable from FY16-17.
  • The Central Board of Direct Taxes issued its final guidelines in January 2017.
  • The shift to PoEM signifies a shift from an objective criterion for tax residence to subjective criteria.

Article Related Questions

  1. Which of the following is not correct regarding the concept of ‘Place of Effective Management (PoEM)’?

  2. 1.It aims to determine a foreign company’s residential status.

    2.It helps to assess if companies are setting up shell subsidiaries abroad to evade taxes.

    3.The shift to PoEM signifies a shift from an objective criterion for tax residence to subjective criteria.

    4.PoEM guidelines are not applicable in India.

    Right Ans : PoEM guidelines are not applicable in India.


  3. The 1857 Uprising was the culmination of the recurrent big and small local rebellions that occured in the preceding hundred years of British Rule. Elucidate (Answer in 150 words) - 2019 Mains


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