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CDL
HOSPITALITY TRUSTS
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.13 Tax (cont'd)
H-REIT received a tax ruling from the Inland Revenue Authority of Singapore (“IRAS”) and subject to meeting
the terms and conditions of the tax ruling which includes a distribution of at least 90% of the taxable income
of H-REIT, H-REIT will not be taxed on the portion of taxable income of H-REIT that is distributed to holders
of H-REIT units. Any portion of the taxable income that is not distributed to holders of H-REIT units will be
taxed on H-REIT. In the event that there are subsequent adjustments to the taxable income when the actual
taxable income of H-REIT is finally agreed with the IRAS, such adjustments are taken up as an adjustment to
the taxable income for the next distribution following the agreement with the IRAS.
Although H-REIT is not taxed on its taxable income distributed, the H-REIT Trustee and the H-REIT Manager
are required to deduct income tax at the applicable corporate tax rate from distributions of such taxable
income of H-REIT (i.e. which has not been taxed in the hands of the H-REIT Trustee) to certain holders of
H-REIT units. The H-REIT Trustee and the H-REIT Manager will not deduct tax from distributions made out
of H-REIT’s taxable income to the extent that the beneficial holder of H-REIT units is:
• An individual (excluding a partnership in Singapore);
• A tax resident Singapore-incorporated company;
• A body of persons registered or constituted in Singapore (e.g. town council, statutory board, registered
charity, registered co-operative society, registered trade union, management corporation, club or trade
or industry association); and
• A Singapore branch of a foreign company which has presented a letter of approval from the IRAS
granting waiver from tax deduction at source in respect of distributions from H-REIT.
The above tax transparency ruling does not apply to gains from sale of real properties. Such gains which are
considered as trading gains are assessable to tax on H-REIT. Where the gains are capital gains, H-REIT will
not be assessed to tax and may distribute the capital gains without tax being deducted at source.
3.14 Segment reporting
An operating segment is a component of the HBT Group, the H-REIT Group and the Stapled Group that
engages in business activities from which they may earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the other components of the HBT Group, the H-REIT
Group and the Stapled Group. All operating segments’ operating results are reviewed regularly by the
board of directors of the HBT Trustee-Manager or the H-REIT Manager (“BOD”) to make decisions about
resources to be allocated to the segment and assess its performance, and is a component for which discrete
financial information is available.
Segment results that are reported to the BOD include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly finance income, finance
expense and trust expenses.
Segment capital expenditure is the total cost incurred on investment properties during the year.
3.15 New standards, interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after 1 January 2014, and have not been applied in preparing these financial statements. None of
these are expected to have a significant effect on the financial statements of the Stapled Group.
NOTES TO THE FINANCIAL STATEMENTS
