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

Appendix CGains arising from the sale of ordinary shares in the Indonesian SPCs, if considered to be trading gains,will be assessed to tax on the Singapore SPCs.Repayment of loans by the Indonesian SPCsAny proceeds received by the Singapore SPCs from repayment of principal on the loans by the IndonesianSPCs are capital receipts and hence not taxable on the Singapore SPCs.SINGAPORE TAXATION OF UNITHOLDERSDistributions by LMIR TrustSubject to LMIR Trust’s distribution policy (see “Distributions”), LMIR Trust’s distributions will mainly bemade out of the following receipts:(a)(b)one-tier (tax-exempt) dividends received from the Target Singapore SPCs (the “tax-exemptincome”); andcapital receipts from the redemption of redeemable preference shares in the Target SingaporeSPCs.Distributions out of tax-exempt incomeUnitholders will be exempt from Singapore income tax on distributions made out of LMIR Trust’s taxexemptincome.For this purpose, the amount of tax-exempt income distributions that LMIR Trust can distribute for adistribution period will be to the extent of the amount of tax-exempt income that it has received and isentitled to receive in that distribution period.Distributions made out of any amount of Distributable Income for a distribution period which LMIR Trustreceived or is entitled to receive as its own tax-exempt income after the end of that distribution period willbe treated as capital distributions and the tax treatment set out under “Distributions out of capital receipts”will apply. The amount of such tax-exempt income may be used to frank tax-exempt income distributionsout of Distributable Income for subsequent distribution periods.Distributions out of capital receiptsUnitholders will not be subject to Singapore income tax on distributions made by LMIR Trust out of itscapital receipts, i.e. amounts received from the redemption of redeemable preference shares in the TargetSingapore SPCs. Such distributions will be treated as returns of capital for Singapore income taxpurposes. For Unitholders who hold the Units as trading or business assets and are liable toSingapore income tax on gains arising from disposal of the Units, the amount of such distributions willbe applied to reduce the cost of the Units for the purpose of calculating the amount of taxable trading gainwhen the Units are disposed of. If the amount exceeds the cost or the reduced cost of the Units, as the casemay be, the excess will be subject to tax as trading income of such Unitholders.Distributions out of taxable trading gains or taxable incomeUnitholders are not subject to further Singapore income tax on distributions made by LMIR Trust out of itstaxable trading gains, for example, gains arising from the disposal of shares in the Target Singapore SPCswhich are determined to be trading gains, or other taxable income. The tax on such gains or income will beassessed on the Trustee at the prevailing corporate tax rate and any distribution made out of such gains orincome is not taxed in the hands of Unitholders. The tax paid by the Trustee on such gains or income is notimputed as a credit to Unitholders for Singapore income tax purposes.Distributions out of capital gainsUnitholders are not subject to Singapore income tax on distributions made by LMIR Trust out of capitalgains, for example, gains arising from the disposal of shares in the Target Singapore SPCs which aredetermined to be capital in nature, unless the distributions are considered gains or profits of a trade orbusiness carried on by the Unitholder, for example, if the Units are held as trading assets.C-4