Place of Effective Management determines company residency based on where key management and commercial decisions are made. POEM determines company residency: it is where key management and commercial decisions for the business as a whole are, in substance, made. Companies meeting the 'active business outside India' test (objective thresholds for passive income, assets, employees and payroll) are presumed to have POEM outside India if a majority of board meetings occur outside India unless real decision-making is exercised in India. For other companies POEM requires (1) identifying who actually makes key decisions and (2) locating where those decisions are made, with emphasis on board location, delegation, head office and senior management, and substance over form.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Place of Effective Management determines company residency based on where key management and commercial decisions are made.
POEM determines company residency: it is where key management and commercial decisions for the business as a whole are, in substance, made. Companies meeting the "active business outside India" test (objective thresholds for passive income, assets, employees and payroll) are presumed to have POEM outside India if a majority of board meetings occur outside India unless real decision-making is exercised in India. For other companies POEM requires (1) identifying who actually makes key decisions and (2) locating where those decisions are made, with emphasis on board location, delegation, head office and senior management, and substance over form.
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