India: Draft guidelines, determining a company's place of effective management

India and "place of effective management"

India's Central Board of Direct Taxes (CBDT) issued draft guiding principles for determining if a company is a resident in India or has its place of effective management in India.

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The Finance Act, 2015, amended the provisions of section 6(3) of the Income-tax Act, 1961 to provide that a company is a resident in India for any previous year, if it is an Indian company or its place of effective management for that year is in India. For these purposes, the place of effective management means the place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance, made.

A legislative memorandum explaining the provisions of the Finance Bill, 2015, stated that a set of guiding principles would be issued to help taxpayers and the tax administration determine the place of effective management. 

 

Read a December 2015 report [PDF 402 KB] prepared by the KPMG member firm in India: The CBDT issues draft guiding principles for determination of the Place of Effective Management of a company

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