CBDT: Final notification maintains 40% tax-rate for POEM hit foreign co., clarifies WDV, b/f losses treatment

CBDT issues final notification u/s. 115JH specifying tax consequences in respect of foreign company treated as resident in India on account of its place of effective management (POEM) being in India; The final notification maintains 40% tax-rate in case of foreign company post POEM application; Likewise, while final notification also allows foreign tax credit (‘FTC’) relief u/s. 90/91, it additionally clarifies on FTC allowability where income on which foreign tax has been paid or deducted, is offered to tax in more than one year; With respect to compliance to TDS provisions (under Chapter XVII-B of the Act), the final notification prescribes that the provisions applicable to the foreign company alone shall apply where more than one provision of Chapter XVII-B apply to the foreign company as resident as well as foreign company; In this regard, final notification additionally clarifies that  “compliance to those provisions of Chapter XVII-B as are applicable to the foreign company prior to its becoming Indian resident shall be considered sufficient compliance to the provisions of said Chapter.”; Similarly, final notification amends  the ‘modification / adaptation’ condition with respect to opening WDV of asset, brought forward losses and unabsorbed depreciation.