确定外国公司实际管理机构（POEM）的指导原则 | 1961年所得税法

Place of effective management (POEM) determines the place where management of the company is actually situated to determine the correct residential status of the company for Income tax purposes. As per amended Section 6(3) of Income Tax Act, a company shall be considered as resident if:

1. It is an Indian Company; or
2. Its place of effective Management in that year is in India

Foreign companies are divided into Active Foreign Company and Passive Foreign Company to determine their POEM. 

POEM is not something which can be defined by fixed guidelines. Facts of each case have to be checked to determine their POEM. The Income Tax department has specified certaining gilding principles to be considered while determining POEM. Therefore, While determining POEM, following points are to be kept in mind:

1. Principles to be considered for determine POEM

a. Location of Board Meeting

• Location where the Board of the Company meets and makes decisions may be considered as the place of effective management.
• However, the board must:
  • Retains and exercises its authority to govern the company; and  
  • Make key management and commercial decisions at Board meeting which are necessary for the business as a whole.

• Therefore, mere formal holding of board meetings at a place will not determine such a place as POEM. If the key decisions by the directors are taken at some place other than the place where formal meetings are held then such other place would be relevant for POEM. 

b. Delegation of Authority to take decision

• A company’s board may delegate some or all of its authority to one or the other person or committee. In such a  case, the location where such other persons or committees are based and formulate the key strategies will be considered as POEM of the company.
• E.g. A Board delegates the authority to make the key management and commercial decisions of the company to the senior management and the Board is merely involved in routinely ratifying the decisions taken by such senior Management. In this case, POEM of the company will be the place where these senior managers take the key decisions and not the location of where board meetings are held. 

c. Location of Head office

• The location of a company’s head office is an important factor because it often represents the place where key company decisions are made. 
• Location of the head office of the company can be determined by considering following points:

1. Company having single location: Location where the company’s senior management and their support staff are based and which is held out to the public as the company’s principal place of business or headquarters.
2. Company having more than one location: If company is having more than one locations, e.g., various members of senior management may operate at offices located in the various countries, then the company’s head office would be where these senior managers:
   1. are primarily or predominantly based; 
   2. normally return to following travel to other locations; or 
   3. meet when formulating or deciding key strategies and policies for the company as a whole.   

3. Company having more than one location permanently: If Senior management of a company operates from different locations on a permanent basis and the members participate through virtual mode rather than physically mode then the head office of the company will be the location where the highest level of management and their direct support staff are located.   

4. If senior management is so decentralized that it is not possible to determine the company’s head office then Location of head office will not of any relevance in determining POEM. In such case, other factors may be considered in determining POEM.

d. Physical location of meeting is not relevant

In case, persons taking decision are no longer required to be physically present at a particular location due to modern technology then the physical location of board meetings will not be the place where key decisions are in substance being made. 

In such cases, POEM will be the place where the directors or the persons taking the decisions or majority of them usually reside.

e.  Decision through Circular Resolution

• If a company takes decisions through circular resolution or round robin voting then POEM is to be determine by considering following factors:

1. 此类决议的频率；
2. 所做决策的类型；
3. 参与此类决策的相关方所在地

• 决策提议者的所在地并非唯一的考量因素。相反，关键在于确定谁拥有决策权以及谁在行使决策权。该人员的所在地更为重要。

f. 股东决策

1. 不计入实际管理机构（POEM）的股东决策

• 根据公司法赋予的权力，某些事项仅由股东决定，例如出售公司重大资产、公司清算等。
• 这些决策影响公司的存续或股东的权利，并非出于经营业务或管理及商业角度。因此，它们通常与确定实际管理机构（POEM）无关。

2. 计入实际管理机构（POEM）的股东决策

• 然而，在某些情况下，股东的参与可能转化为实质性管理，例如通过股东协议等形式安排。
• 在这种情况下，股东的指导演变为越权干预，可能导致实际管理权由股东行使。

因此，必须根据具体情况逐案确定股东的参与是否导致了实质性管理。

g. 日常决策与实际管理机构（POEM）无关

• 通告已明确，由初级和中级管理层做出的日常运营决策与确定实际管理机构（POEM）无关，例如经理或高级经理的任命、维修与保养、人力资源政策等。
• 关键的管理和商业决策才与确定实际管理机构（POEM）相关，例如开设新的生产设施、停产主要产品线等。
• 如果日常决策和关键管理决策由同一人做出，则有必要区分这两类决策，并据此评估关键管理和商业决策的做出地点。

h. 若上述因素无法确定实际管理机构（POEM）时的剩余原则

如果无法通过上述原则确定实际管理机构（POEM），则可考虑以下次要因素：

1. 公司主要和实质性业务的开展地；或
2. 公司会计记录的保存地。

2. 如何应用指导原则确定实际管理机构（POEM）

• 已明确，实际管理机构（POEM）是根据与公司管理或控制相关的所有相关事实来确定的。上述任何原则都不能单独决定实际管理机构（POEM）。
• 例如：
  • 如果一家外国公司由一家印度公司全资拥有，仅凭其控股公司位于印度这一事实，不足以断定其实际管理机构（POEM）位于印度。
  • 同样，如果外国实体的常设机构位于印度，这本身也不足以作为确定其实际管理机构（POEM）位于印度的结论性证据；

因此，必须综合考量上述所有指导原则，以确定任何实体的实际管理机构（POEM）。

• 此外，这些原则不应仅在特定时间点进行检查，而应考虑一段时间内开展的活动。因此，不应采用“快照”式的方法。
• 此外，如果根据事实和情况，确定在上一年度实际管理机构（POEM）既在印度境内又在印度境外，则若其主要/绝大部分时间在印度，应推定其实际管理机构（POEM）位于印度。

3. 援引实际管理机构（POEM）

• 如果任何评估官员希望根据实际管理机构（POEM）启动程序，将一家在印度境外注册成立的公司视为印度居民，则必须事先获得首席专员或专员的批准。

• 此外，如果评估官员提议根据实际管理机构（POEM）将一家在印度境外注册成立的公司视为印度居民，则任何此类认定必须事先获得由首席专员或专员组成的三人委员会的批准。此外，在就此事发布任何指示之前，应给予该公司陈述意见的机会。

4. Illustrations

• The Circular has shared few illustrations to give an idea that how these guiding principles are to be used for determining POEM.
• E.g. 

FactsStatus1. Company A is incorporated in Country X and is 100% subsidiary of Indian Company. 
2. All assets of the company are located in Country X.
3. All employees are also based in Country X
4. 30% of the total income is from transactions where purchase is made from associate enterprises and sales are also made to associate enterprises.
5. 10% of total Income is from the royalty1. Since less than 50% of the total income of the company is from “Passive Income” therefore, the company is engaged in “Active business outside India”1. In Above mentioned facts, if 3 out of 50 employees are based out in India and their salary is INR 3 Crores out of total salary cost of INR 5 Crores.1. Company A Co. is not engaged in active business outside India as more than 50% of the total payroll expenditure is pertaining to employees based out in India1. If in First case, all directors are Indian residents and 3 Board meetings out of 5 are held outside India.1. Since majority of Board meetings are held outside India then POEM shall be considered outside India

5. Conclusion

Change in principles of determining residential status from “Wholly control and Management” to “Effective Place of Management” has changed the residential status of most of the companies such as Investment companies established overseas by Indian Companies to avoid residential status.

Determination of POEM is completely based on Facts and circumstances of each case and every company is required to seek a professional opinion to determine its POEM as change in residential status can have major impact on tax liabilities.