NOTES TO THE FINANCIAL STATEMENTS
3 Significant accounting policies (Cont’d)
3.9 Tax (Cont’d)
The measurement of deferred tax reflects the tax consequences that would follow the manner in which
the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets
and liabilities. For investment property that is measured at fair value, the presumption that the carrying
amount of the investment property will be recovered through sale has not been rebutted. Deferred tax is
measured at the tax rates that are expected to be applied to the temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets and they relate to income taxes levied by the same tax authority on the same entity,
or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or the
tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the unused tax losses and credits can be utilised. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
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. Singapore Budget 2015 has extended the expiry date of the concession from
31 March 2015 to 31 March 2020 although the proposed change has yet to be enacted.
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 which has been presented a letter of approval from IRAS
granting waiver from tax deducted at source in respect of distributions from CIT.
CAMBRIDGE INDUSTRIAL TRUST | ANNUAL REPORT 2014
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