Which of the following is not correct regarding the concept of ‘Place of Effective Management (PoEM)’?
(a) It aims to determine a foreign company’s residential status.
(b) It helps to assess if companies are setting up shell subsidiaries abroad to evade taxes.
(c) The shift to POEM signifies a shift from an objective criterion for tax residence to subjective criteria.
(d) PoEM guidelines are not applicable in India.
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Option D - PoEM guidelines are not applicable in India.
☆ Explanation :-
- Option D is incorrect :- PoEM guidelines became applicable in India from FY16-17.
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☆ Place of Effective Management (PoEM) :-
- 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.
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Which of the following is not correct regarding the concept of ‘Place of Effective Management (PoEM)’?
(a) It aims to determine a foreign company’s residential status.
(b) It helps to assess if companies are setting up shell subsidiaries abroad to evade taxes.
(c) The shift to POEM signifies a shift from an objective criterion for tax residence to subjective criteria.
(d) PoEM guidelines are not applicable in India.
Option D is the correct option. please check my answer because iam not sure with my answer
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