In a landmark case dating back to 1906: Lord Loreburn (in De Beers Consolidated Mines Ltd v Howe 5TC198) said:
” . . . the real business is carried on where the central management and control abides. It remains to be considered whether the present case falls within that rule. This is a pure question of fact, to be determined, not according to the construction of this or that regulation or by-law, but upon a scrutiny of the course of business and trading”.
“1) The burden of proving residence lay on the Revenue. If they failed to establish that the company’s residence was within their jurisdiction then the company ought not to be taxed.
(2) Although a board might do what it was told to do, it did not follow that the control and management lay with another, so long as the board exercised its discretion when coming to its decisions and would have refused to carry out an improper or unwise transaction.”
Both cases centred on whether a business connected with a high tax jurisdiction but operated from a low tax area could or should be taxed in the high tax area (in these two cases, the UK, but the same would substantially apply elsewhere). Both instances were effectively decided on the question of “management & control,” i.e. where the decisions were taken.