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: Central Excise rule to resale the machines to a new company :: due date for vat payment :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: TDS :: empanelment :: form 3cd :: VAT Audit :: articles on VAT and GST in India :: list of goods taxed at 4%
 
 
« Direct Tax »
 Income tax returns: How to calculate income from house property
 CBDT proposes new accounting standards for real estate firms
 1 lakh entities face I-T action as ‘clean money’ drive gains pace
 Here are 4 things to know about how CBDT improves ease of doing business by issuing PAN and TAN within 1 day
 Online platforms make tax filing easy, help fill details automatically
 Delhi HC refuses to stay tax case against Young Indian
 CBDT issues draft ICDS on real estate
 CBDT chairman Sushil Chandra gets one-year extensiona
 Income-tax (9th Amendment) Rules, 2017? - Amendment of Income-tax Rules, 1962 - Prescribing form & manner of exercise of option by the domestic company for the purposes of section 115BA of the Income-tax Act, 1961-reg
 CBDT issues draft rules for valuation of unquoted shares
 Central Board of Direct Taxes releases rules to compute fair market valuation of unlisted shares

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 2017 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