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LIPPO MALLS INDONESIA RETAIL TRUST ANNUAL REPORT 2014
10. INCOME TAX (CONT’D)
10C. Deferred tax balance in the statements of financial position: (Cont’d)
Withholding Tax in Indonesia
Under the income tax treaty between Singapore and Indonesia, the Indonesia withholding tax is capped at 10% in
respect of:
(a)
Dividends paid by a company resident in Indonesia to a company resident in Singapore which owns directly at
least 25% of the capital of the company paying the dividends; and
(b)
Interest paid to a resident of Singapore.
Indonesia withholding tax is at 15% in respect of dividends paid by a company resident in Indonesia to a company
resident in Singapore who owns directly less than 25% of the capital of the company paying the dividends.
Dividends from Indonesia Subsidiaries
Dividends received by the Singapore subsidiaries of the Trust from their respective Indonesia subsidiaries are exempt
from Singapore income tax under section 13(8) of the Income Tax Act provided the following conditions are met:
(a)
In the year the dividends are received in Singapore, the headline corporate tax rate in the foreign country from
which the dividends are received is at least 15%;
(b)
The dividends have been subject to tax in the foreign country from which they are received; and
(c)
The Singapore Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to the Singapore
subsidiaries.
Dividends from Singapore Subsidiaries
Dividends received by the Trust from the Singapore subsidiaries are exempt from Singapore income tax provided that
the Singapore subsidiaries are tax residents of Singapore for income tax purposes.
Interest Income from Indonesia Subsidiaries
Interest received by the Singapore subsidiaries of the Trust on loans made to the Indonesia subsidiaries is exempt from
Singapore income tax under section 13(12) of the Income Tax Act on the condition that the full amount of remitted
interest, less attributable expenses, is distributed by the Singapore subsidiaries to the Trust for onward distribution
to its unitholders.
Redemption of Redeemable Preference Shares in Singapore Subsidiaries
Proceeds received by the Trust from the redemption of its redeemable preference shares in the Singapore subsidiaries
at the original cost of the redeemable preference shares are regarded as capital receipts and hence not subject to
Singapore income tax.
Receipt from Indonesia Subsidiaries for Repayment of Shareholder Loans
Proceeds received by the Singapore subsidiaries for the repayment of the principal amount of the shareholder loans
from their Indonesia subsidiaries are capital receipts and hence not subject to Singapore income tax.
Notes to the Financial Statements
(Cont’d)
31 December 2014
