India and Its Tryst with Subjective Rules: An Analysis of the Recent Place of Effective Management Guidance

This article examines India’s recent introduction of the subjective place of effective management test to determine Indian tax residence. The author provides an overview of international corporate tax residence rules, and Indian corporate tax residence rules before and after the adoption of the place of effective management test. The article addresses the Indian Central Board of Direct Taxes’ January 2017 Circular, which is intended to elucidate application of the place of effective management test in India, and critiques its effectiveness in providing clarity and certainty to taxpayers. [Ed. Note that this article was finalized for publication before the OECD released the reservation and notification statement for India to the Multilateral Convention (2016) on 7 June 2017.]