Principles for determination of POEM of a Company formulated: Govt.

The Finance Act, 2015 has amended, with effect from April 1, 2016, the provisions of Income-tax Act relating to determination of residence of a company.  In accordance with the amended provisions a company would be said to 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.

The Explanatory Memorandum to the Finance Bill, 2015 stated that a set of guiding principles for determination of POEM would be issued for the benefit of the taxpayers as well as the tax administration.

In this regard draft guiding principles for determination of POEM have been formulated and have been uploaded at http://goo.gl/TmymDc for comments from stakeholders and general public.

The comments and suggestion on the draft guidance may be sent by 2nd January, 2016.

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