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Place of Effective Management: Concept and Impact

To determine the residential status of foreign companies, the Finance Act 2015 introduced the concept of place of effective management (POEM). By definition in Indian Tax Laws “Place of effective management” means 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.

The Finance Act, 2016 has changed the effectivity of the said amendment to section 6(3) of the Act. These amended provisions came into effect from 1st April 2017 and are now applicable for Assessment Year 2017-18 and subsequent assessment years.… Read more