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Residential status of a company -How should it be determined

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February 17, 2022

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1 mins read

Question – Residential status of a company – How should it be determined ?

Answer –

A company is said to be resident in India in any previous year, if : –

it is an Indian company; or
its Place of Effective Management (‘POEM’), in that year, is in India.
Thus, an Indian Company would always a tax resident of India irrespective of whether, the control and management of its affairs, is situated partly in India, wholly in India or wholly outside India.

However, in case of a foreign company, it would be considered as a tax resident of India, only when its Place of Effective Management (‘POEM’), in that year, is in India.

Arinjay Jain

Bio of author

Arinjay is a Chartered Accountant with more than 20 years of post-qualification experience. He worked as Director, in the M&A Tax Division at KPMG in India. Presently, he is advising several MNCs in UAE on Economic Substance Regulations and impact of the UAE Corporate Tax Law on their business and clients across globe on International Tax issues . He is a well recognised Trainer of International Tax and UAE Corporate Tax. The areas of service include the following : - Advise and Compliance relating to International Tax Issues; Advise relating to UAE Corporate Tax Issues; Advise and Compliance relating to UAE Economic Substance Regulations; Advise and Compliance relating to Indian Income Tax Issues; Other connected matters from a Regulatory perspective.

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