Notes to The
Financial Statements
Year ended 31 December 2015
3 Significant accounting policies (Cont’d)
3.8 Income tax expense (cont’d)
A foreign non-individual Unitholder refers to a Unitholder who is not a resident of Singapore for income tax
purpose and:
•
who does not have any permanent establishment in Singapore; or
•
who carries on any operation through a permanent establishment in Singapore, where the funds used by
that person to acquire the units in that REIT are not obtained from that operation in Singapore.
The above tax transparency treatment does not apply to gains from disposal of any properties such as real estate
properties, shares, etc that are determined by the IRAS to be revenue gains chargeable to tax. Tax on such gains
or profits will be subject to tax, in accordance to Section 10(1)(a) of the Income Tax Act (Cap 134) and collected
from the Trustee. Where the gains are capital gains, they will not be subject to tax and the Trustee and the Manager
may distribute the capital gains without tax being deducted at source.
3.9 Distribution policy
The Trust has a distribution policy to distribute at least 90.0% of its taxable income, other than gains from the sale
of real estate properties that are determined by IRAS to be trading gains, and net overseas income, with the actual
level of distribution to be determined at the Manager’s discretion. For the taxable income that is not distributed,
referred to as retained taxable income, tax will be assessed on the Trustee. Where such retained taxable income
is subsequently distributed, the Trustee need not deduct tax at source.
Net overseas income refers to the net profits (excluding any gains from the sale of property or shares, as the case
may be) after applicable taxes and adjustment for non-cash items such as depreciation derived by the Trust from
its properties, if any.
Distributions to Unitholders are made on a quarterly basis, with the amount calculated as at 31 March, 30 June,
30 September and 31 December each year for the three-month period ending on each of the said dates. In
accordance with the provisions of the Trust Deed, the Manager is required to pay distributions within 75 days after
the end of the first three distribution periods of a financial year and within 90 days from the end of a financial year.
Distributions, when paid, will be in Singapore dollars.
3.10 Earnings per unit
The Group presents basic and diluted earnings per unit (“EPU”) data for its units. Basic EPU is calculated by
dividing the total return for the period after tax by the weighted average number of units outstanding during the
period, adjusted for own units held. Diluted EPU is determined by adjusting the total return for the period after tax
and the weighted average number of units outstanding, adjusted for own units held, for the effects of all dilutive
potential units.
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ParkwayLife REIT
Annual Report 2015
