Businesses are currently dealing with a multitude of issues as a result of the measures taken to stop the global spread of the COVID-19. One aspect that might not currently feature at the top of the list is the maintenance of corporate tax residency.
This has the potential to fall through the cracks when faced with bigger and more urgent issues. But it is an issue tax and legal teams need to over the coming weeks and months.
Corporate tax residency dictates where a company will be taxed on its worldwide profits (subject to any exemptions).
A company is generally tax resident in the country where it is incorporated or where it has its ‘Place of Effective Management’ (“POEM”).