Place of Effective Management (PoEM)
Posted on : 25 Dec 2019
Views: 5777- 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
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Which of the following is not correct regarding the concept of ‘Place of Effective Management (PoEM)’?
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.
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