Wednesday, June 3, 2020

POEM or PE Not Formed if Key Managerial Person is Stuck in India during Lockdown

The CBDT has promised a relief on case by case basis for individuals stuck in India during the Corona Virus outbreak, who are otherwise CEOs and Key Managerial Persons of foreign entities.

Such persons' stay in India may lead to a creation of Permanent Establishment (PE) or Place of Effective Management (POEM) of such foreign entities in India, which would've brought their foreign incomes to tax in India.

The government has exempted individuals by excluding their stay in India during the lockdown from days considered for tax residency calculation. With this announcement, the relief also comes to companies.