Abstract
From 2013 through 2022, Colombia applied the commonly accepted standard for the place of effective management (PoEM) to determine residency for tiebreaker purposes in treaty disputes. But that test got trickier for corporate taxpayers starting in 2023, when Colombian tax authorities amended the rules for determining residency under its version of PoEM, which translates from the Spanish as “effective place of management” or EPM. They have now focused their attention on the place where any managerial decisions are made, whether or not strategic and whether or not made by senior management. In this Talking Points, Eric Thompson explains how those authorities may have opened Pandora’s Box, releasing a host of ills into tax planning for international companies and wealth managers.
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