What Is Poem? Place Of Effective Management – Legallands
Introduction to Place of Effective management
The 1990s have been regarded as a watershed event in the economic sector of India. Various reforms had been introduced at that point in time and the financial sector changed its direction. Since then the Indian regulatory system has been experiencing constant change and reform.
The Indian system had in the latest introduced Goods and Services, Integrated Child Development Services, Indian Accounting Standards. India along with these services introduced Place of Effective Management in its Finance act, 2015 which came into assessment in the year 2015.
Definition of Place of Effective Management
Under Place of effective Management or POEM for short, a company would become a resident of India if it was an Indian Company, or during that year its operation, control and management were being handled in India.
As per the provision of the Finance Act, 2015 the company whose effective management is taking place in India will be considered as a resident of India. In layman’s language, the Place of effective management would be where key managerial work and commercial work which is key for the conduct of the business of an entity as a whole.
Internationally the concept of POEM is not new but in India, it is a relatively new concept. Hence, if a foreign company is found to have its Place of Effective Management in India, it would have its own set of tax complications. The introduction of POEM thereby assumes larger significance to the foreign company having nexus with India, especially Indian MNCs having outbound investment.
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Corporate Professional Team
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