MNCs get resident taxation relief

MNCs had concerns that their regional offices having employees handling administrative functions for multiple countries would trigger PoEM

Routine administrative functions by the regional headquarters in India of multinational corporations (MNCs) have been exempted from taxes under the rules on Place of Effective Management (PoEM). 

PoEM is a test of residential status of companies, triggered by the practice of some companies effectively operating out of India but incorporating themselves abroad, to exploit a low or zero tax environment.

The Central Board of Direct Taxes (CBDT) has said functions such as payroll, accounting, human resources or routine banking by these headquarters will not lead to a PoEM in India.

However, this is subject to a condition that regional headquarters should be functioning