ARA LOGOS Logistics Trust

[HitandRun]

I find it a little inconceivable that with all the uncertainties surrounding the extension of the tax exemption on foreign-sourced income received from overseas properties that CLT would proceed with an foreign acquisition at this time.

Does ARA knows something we dun? Or do they have a strategy to mitigate the impact in the event that the tax exemption is not extended?

Considering the list of potential pipeline of asset acquisitions from sponsor CWT, it makes this decision even more inexplicable.

Lonewolf san

I'm not a tax expert unlike Leonard Ong of KPMG. However, I suspect he is just fear mongering.

E.g. Under normal circumstances, a company could apply for relief on s13(8) of the income tax act. If the company is unable to do that, it can still rely on s13(12). One of the crucial issues is whether the headline tax in the country whereby the property is situated in has a headline tax of at least 15%. Another important point is the domicile of the holding company (or intermediate holding company). The bottomline is that without the extension of the tax exemption, the REIT might still be able to claim exemption, except that it is not automatic, i.e. more paperwork is involved.....

If you wish to read more about s13(12), here is more literature:

Tax Exemption for s13(12) - specific scenarios