Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT Audit :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: TDS :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: form 3cd :: due date for vat payment
Direct Tax »
 CBDT unveils norms for computing FMV of trust assets
 CBDT starts issuing second round of Certificates of Appreciation to tax payers
 Income Tax Department Launches SMS Alert Service on TDS Deductions
 Salaried taxpayers to get SMS alerts for TDS deductions
 Salaried tax payers to get SMS alerts on TDS deductions
 Mumbai zone direct tax collection flat in H1 FY17
 CBDT issues final rules for taxing share buy back by companies
 CBDT issues final rules for taxing share-buyback
 The direct tax collections up to September, 2016 are at Rs. 3.27 lakh crore which is 8.95% more than the net collections for the corresponding period last year.
 IDS is tremendous success: CBDT chief Rani Singh Nair
 Submit monthly data of appeals disposed of: CBDT to officers

Experts seek more clarity from CBDT on PoEM norms , detailed FAQs
February, 09th 2016

Tax experts have sought greater clarity from Central Board of Direct Taxes (CBDT) on draft Place of Effective Management (PoEM) norms that aim to determine the tax residency of companies, and said that a set of objective criteria be put in place before implementing them.

They have also suggested that detailed FAQs be brought out on various provisions.

The CBDT should provide guidance with regard to expressions like “management and commercial decisions” and “conduct of company’s business as a whole” as interpretation of these expressions might lead to more litigations, they said.

Two-stage process

The draft guidelines on PoEM, to assess a company’s tax liability, have suggested a two-stage process.

According to the draft, the first stage would identify the persons who make the key management and take commercial decisions for the company. The second stage will determine the place where these decisions are made.

An important concept

Tax residency, said KPMG India’s Tax Partner Vikas Vasal, “is an important concept for determining the taxation of any entity in India, therefore, the basis for determining the tax residency should be simple, clear and easy to apply.

“Though residential status is to be determined based on the facts and circumstances of a particular case, it is imperative that objective criterion be laid out to determine PoEM, to the extent feasible, to avoid uncertainty and potential litigation,” he said.

‘New from an Indian perspective’

American Chamber of Commerce (AMCHAM) in its suggestions to the CBDT has said: “Given that the changes proposed are new from an Indian perspective, appropriate guidelines or Frequently Asked Questions should be issued to provide clarity to the taxpayers on various questions relating to PoEM.”

Ashok Maheshwary & Associates Managing Partner Amit Maheshwari said that the CBDT should not go ahead with the implementation of draft PoEM guidelines as it would go against the non-adversarial tax regime which the government is trying to promote.

Don’t put norms in place or defer PoEM

“The draft guidelines in the current form should not be implemented or PoEM should be postponed. There is a risk of subjectivity in the whole process and the tax authorities at the lower level have been very aggressive in the past. This is bound to increase tax disputes and may not bode well for the non-adversarial tax regime which the government is trying to showcase,” Mr. Maheshwari said.

Mr. Vasal suggested there should be greater clarity on active and passive income for the purpose of determination of residency of a company.

Protect genuine business models

“It is important that genuine business models and transactions are protected. Accordingly, the concept of passive income in the guidelines require some reconsideration,” he said.

Mr. Vasal further suggested that royalty income arising from licensing of Intellectual Property Rights or other assets, software payments and telecom charges etc, should not be treated as passive income.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Outsourcing Test Solutions Software Testing Software Bug Testing Software Issues Tracking Software Issue Fix Software Code Optimization Database Design Optimization

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions