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EC World Real Estate Investment Trust ANNUAL REPORT 2016
NOTES TO THE
Financial Statements
For the Financial Year ended 31 December 2016
2.
Significant accounting policies (continued)
2.3 Expenses (continued)
(c) Trustee’s fees
Trustee’s fees are recognised on an accrual basis using the applicable formula stipulated in Note 1(a).
(d) Manager’s management fees
Manager’s management fees are recognised on an accrual basis using the applicable formula stipulated in
Note 1(b).
2.4 Income taxes
Current income tax for current year and prior periods is recognised at the amount expected to be paid or recovered
from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the
reporting date.
Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from
the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and
affects neither accounting nor taxable profit or loss at the time of the transaction.
A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries,
except where the Group is able to control the timing of the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable future.
A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available
against which the deductible temporary differences and tax losses can be utilised.
Deferred income tax is measured:
(i)
at the tax rates that are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively
enacted by the reporting date; and
(ii)
based on the tax consequence that will follow from the manner in which the Group expects, at the reporting
date, to recover or settle the carrying amounts of its assets and liabilities except for investment properties.
Investment property measured at fair value is presumed to be recovered entirely through sale.
Current and deferred income taxes are recognised as income or expense in the Statement of Total Return, except
to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity.
Except for the tax exemption as described below, taxable income earned by ECW is subject to Singapore income
tax at the prevailing corporate tax rate. Such taxable income includes interest income received from Singapore
Holding Companies, interest income arising from bank deposits placed with financial institutions in Singapore and
interest income received in Singapore from financial institutions outside Singapore.
Dividend receivable by ECW from the Singapore Holding Companies are one-tier tax exempt dividends. The
Trustee is not taxed on dividend income distributed by the Singapore Holding Companies resident in Singapore.