LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Appendix CThe taxable income of a trust, or part thereof, is taxed at the prevailing corporate rate of income tax and thetax is assessed on the trustee in the following circumstances:• where the income is derived from any trade or business carried on by the trustee, in its capacity as thetrustee of the trust;• where the beneficiaries of the trust are not resident in Singapore; or• where the beneficiaries are not entitled to the income of the trust.Any distribution made out of such income which has been assessed to tax on the trustee is not taxable inthe hands of the beneficiaries. The tax paid by the trustee on such income is not imputed as a credit to thebeneficiaries for Singapore income tax purposes.Where the taxable income of a trust is income other than that derived from any trade or business carried onby the trustee, such income may be assessed to tax directly on the beneficiaries of the trust where thebeneficiaries are resident in Singapore and are entitled to the income of the trust.In a real estate investment trust, which is defined in the Income Tax Act to mean a trust constituted as acollective investment scheme authorised under section 286 of the Securities and Futures Act (Cap.289) and listed on the Singapore Exchange, that invests or proposes to invest in immovable property andimmovable property-related assets, (referred hereinafter as a “REIT”), the trustee may be charged at alower rate or not charged with any tax, as the Comptroller of Income Tax (“Comptroller”) shall determineand subject to the satisfaction of the Comptroller. This treatment, if granted, will apply to only certainincome of a REIT, including rental income or income from the management or holding of immovableproperty but not including gains from the disposal of immovable property (“tax-transparent income”).Beneficiaries of the REITare instead assessed to tax on the share of such tax-transparent income to whicheach of them is beneficially entitled. The tax may be assessed directly on the beneficiaries or deducted bythe trustee from the amount of distribution made to the beneficiaries, depending on their own particularcircumstances.The income of a REIT that is taxable in the hands of its beneficiaries does not include income from anytrade or business carried on by the trustee that is not tax-transparent income. Tax on such non taxtransparentincome would have been assessed on the trustee of the REIT. Beneficiaries of the REITare nottaxed on distributions made out of such non tax-transparent income. The tax paid by the trustee on suchnon tax-transparent income is not imputed as a credit to the beneficiaries for Singapore income taxpurposes.Where the REIT derives any tax-exempt income, such income is exempt from tax in the hands of thetrustee. Beneficiaries of the REIT will also be exempt from tax on the share of such tax-exempt income towhich each of them is beneficially entitled.SINGAPORE TAXATION OF LMIR TRUSTLMIR Trust is liable to Singapore income tax on:(a)(b)income accruing in or derived from Singapore; andunless otherwise exempt, income derived from outside Singapore which is received in Singapore ordeemed to have been received in Singapore by the operation of law.The Singapore taxation of LMIR Trust in respect of the income and gains which it may derive from theProperties is described below.Dividends from the Target Singapore SPCsLMIR Trust’s income will comprise substantially dividends received from its holding of ordinary shares inthe Target Singapore SPCs. Provided that the Target Singapore SPCs are tax residents of Singapore forincome tax purposes, these dividends will be one-tier (tax-exempt) dividends and hence exempt from tax inthe hands of the Trustee.A company is a tax resident of Singapore if the management and control of its business is exercised inSingapore.C-2