FRASERS HOSPITALITY TRUST ANNUAL REPORT 2015
161
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 20 JUNE 2014 (DATE OF CONSTITUTION) TO 30 SEPTEMBER 2015
8.
FINANCE COSTS
FHT FH-REIT Group
FH-BT
20 Jun 2014 to
30 Sep 2015
20 Jun 2014 to
30 Sep 2015
20 Jun 2014 to
30 Sep 2015
$’000
$’000
$’000
(a)
Amortisation of debt upfront costs
1,917
1,917
–
(b)
Finance costs
– Interest expense on loans and borrowings
17,295
17,295
–
– Others
463
463
–
17,758
17,758
–
9.
TAXATION
For Singapore income tax purposes, FHT is not a taxable entity. Instead, FH-REIT and FH-BT are subject to tax
separately based on their own characteristics as a real estate investment trust and a registered business trust
respectively.
FH-REIT has been granted tax exemption under Section 13(12) of the Singapore Income Tax Act in respect of
certain foreign-sourced income derived from their respective overseas subsidiaries, subject to meeting certain
conditions.
FH-BT which is registered as a business trust in Singapore under the Business Trust Act will be treated like a
company under the one-tier corporate tax system for Singapore income tax purposes. Consequently, FH-BT
will be assessed to Singapore income tax on its taxable income, if any, at the prevailing corporate tax rate in
accordance with the Income Tax Act.
The income tax expense is in respect of taxes paid by FH-REIT’s operations in Singapore, Australia, UK, Japan
and Malaysia.
Subject to full compliance with the terms and conditions of the above Tax Rulings, the taxation of the FH-REIT
Group is as follows:
(i)
Tax Ruling 1
FH-REIT has obtained the Tax Transparency Ruling from the IRAS in respect of the “
Specified Taxable
Income
” (as defined herein) derived from the InterContinental Singapore and Fraser Suites Singapore
(collectively the “Singapore investment properties”). Such income includes rent and income from or
ancillary to the management or holding of the Singapore investment properties, as well as interest
income from the placement of cash surpluses in bank deposits and investment in debt securities, but not
gains from the disposal of the Singapore investment properties.
Subject to the terms and conditions of the Tax Transparency Ruling, the REIT will not be taxed on Specified
Taxable Income distributed to the Stapled Securityholders in the year in which the income was derived.
Instead, the REIT Trustee and the REIT Manager would undertake to deduct income tax at source at
the prevailing corporate tax rate from distributions made to certain Stapled Securityholders out of such
Specified Taxable Income.
The application of the Tax Transparency Ruling is conditional upon the REIT Trustee and the REIT Manager
fulfilling certain terms and conditions including distribution of at least 90.0% of Specified Taxable Income
by the REIT Trustee to the Stapled Securityholders in the year in which the income is derived by the REIT
Trustee.
