/ 1 2 7
NOTES TO THE FINANCIAL STATEMENTS
C A M B R I D G E I N D U S T R I A L T R U S T
A N N U A L R E P O R T 2 0 1 5
3.
Significant accounting policies (Cont’d)
3.8 Tax (Cont’d)
In determining the amount of current tax, the Group takes into account the impact of uncertain tax
positions and whether additional taxes may be due. The Group believes that its accruals for tax liabilities
are adequate for all open tax years based on its assessment of many factors, including interpretations of
tax laws and prior experience. This assessment relies on estimates and assumptions and may involve a
series of judgements about future events. New information may become available that causes the Group
to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities
will impact tax expense in the period that such a determination is made.
The Inland Revenue Authority of Singapore (“IRAS”) has issued a tax ruling on the taxation of CIT and its
Unitholders. Subject to meeting the terms and conditions of the tax ruling issued by IRAS, the Trustee
will not be assessed to tax on the taxable income of CIT on certain types of income. Instead, the Trustee
and the Manager will deduct income tax at the prevailing corporate tax rate (currently 17.0%) from the
distributions made to Unitholders that are made out of the taxable income of CIT, except:
(i)
where the beneficial owners are individuals or Qualifying Unitholders, the Trustee and the Manager
will make the distributions to such Unitholders without deducting any income tax; or
(ii)
where the beneficial owners are foreign non-individual Unitholders, the Trustee and the Manager
will deduct Singapore income tax at the reduced tax rate of 10.0% for distributions made before
31 March 2020.
A “Qualifying Unitholder” is a Unitholder who is:
•
A Singapore-incorporated company which is a tax resident in Singapore;
•
A body of persons other than a company or a partnership, registered or constituted in Singapore
(e.g. a town council, a statutory board, a registered charity, a registered cooperative society, a
registered trade union, a management corporation, a club and a trade industry association); or
•
A Singapore branch of a foreign company.
A “foreign non-individual Unitholder” is one which is not a resident of Singapore for income tax
purposes and;
•
who does not have a permanent establishment in Singapore; or
•
who carries on any operation in Singapore through a permanent establishment in Singapore, where
the funds used to acquire the Units are not obtained from that operation in Singapore.
The above tax transparency ruling does not apply to gains from sale of real estate properties, if considered
to be trading gains derived from a trade or business carried on by CIT or distribution income received
or receivable from its quoted investments. Tax on such gains or profits will be assessed, in accordance to
section 10(1)(a) of the Income Tax Act, Chapter 134 and collected from the Trustee. Where the gains are
capital gains, they will not be assessed to tax and the Trustee and the Manager may distribute the capital
gains without tax being deducted at source.
