In these circumstances the GST/VAT is recognised as part of the cost
of acquisition of the asset or as part of the expense.
Cash flows are included in the Cash Flow Statements on a gross basis.
The GST component of cash flows arising from investing and financing
activities which is recoverable from or payable to the Australian
Taxation Office is classified as operating cash flows.
(g) Taxation
Under current Australian income tax legislation DDF, DIT and DOT,
are not liable for income tax provided they satisfy certain legislative
requirements. These Trusts may be liable for income tax in jurisdictions
where foreign property is held (i.e. United States, France, Germany,
Canada, New Zealand).
DXO is a trading trust and is subject to Australian income tax as follows:
the income tax expense for the year is the tax payable nn on the current
year’s taxable income based on a tax rate of 30% adjusted for
changes in deferred tax assets and liabilities and unused tax losses;
nn deferred tax assets and liabilities are recognised for temporary
differences arising from differences between the carrying amount of
assets and liabilities and the corresponding tax base of those items.
The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the
deferred tax assets or liabilities. An exception is made for certain
temporary differences arising from the initial recognition of an asset
or a liability (where they do not arise as a result of a business
combination and did not affect either accounting profit/loss or
taxable profit/loss);
nn deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses;
nn deferred tax assets and liabilities are not recognised for temporary
differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to
control the timing of the reversal of the temporary differences and it
is probable that the differences will not reverse in the foreseeable
future; and
nn current and deferred tax balances attributable to amounts
recognised directly in equity are also recognised directly in equity.
Withholding tax payable on distributions received by the Trusts from
DEXUS Industrial Properties Inc (US REIT) and DEXUS US Properties
Inc (US REIT II) are recognised as an expense when tax is withheld.
In addition, a deferred tax liability or asset and related deferred tax
expense/benefit is recognised on differences between the tax cost
base of US assets and liabilities in the Trusts (held by US REIT and US
REIT II) and their accounting carrying values at balance date. Any
deferred tax liability or asset is calculated using a blend of the current
withholding tax rate applicable to income distributions and the
applicable US federal and state taxes.
Under current Australian income tax legislation, the security holders will
generally be entitled to receive a foreign tax credit for US withholding
tax deducted from distributions paid by the US REIT and US REIT II.
DIT France Logistique SAS (DIT France), a wholly owned sub-trust of
DIT, is liable for French corporation tax on its taxable income at the rate
of 34.43%. In addition, a deferred tax liability or asset and its related
deferred tax expense/benefit is recognised on differences between the
tax cost base of the French real estate assets and their accounting
carrying value at balance date.
DEXUS GLOG Trust, a wholly owned Australian sub-trust of DIT, is
liable for German income tax on its German taxable income at the rate
of 15.82% from 1 January 2008 (this rate was 26.37% prior to
1 January 2008). In addition, a deferred tax liability or asset and its
related deferred tax expense/benefit is recognised on differences
between the tax cost base of the German real estate assets and their
accounting carrying value at balance date.
DOT NZ Sub-Trust No. 1, a wholly owned Australian sub-trust of DOT,
is liable for New Zealand corporate tax on its New Zealand taxable
income at the rate of 30%. In addition, a deferred tax liability or asset
and its related deferred tax expense/benefit is recognised on
differences between the tax cost base of the New Zealand real estate
asset and the accounting carrying value at balance date.
DEXUS Canada Trust, a wholly owned Australian sub-trust of DIT, is
liable for Canadian income tax on its Canadian taxable income at the
rate of 25%. In addition, a deferred tax liability or asset and its related
deferred tax expense/benefit is recognised on differences between the
tax cost base of the Canadian real estate asset and the accounting
carrying value at balance date.
Tax consolidation
DXH is the head entity in the DXH tax consolidated group comprising
DEXUS Funds Management Limited, DEXUS Property Services Pty
Limited, DEXUS Financial Services Pty Limited and DEXUS Wholesale
Property Limited. The implementation date for the tax consolidated
group was 1 October 2004. During the year DEXUS CMBS Issuer Pty
Limited was formed and joined the tax consolidated group. The entities
within the DXH tax consolidated group entered into a Tax Sharing Deed
and Tax Funding Deed on 29 June 2007 (effective 1 July 2006).
During the year, newly incorporated entities, DEXUS Finance No.2 Pty
Limited and DEXUS Finance No.3 Pty Limited together with DEXUS
Finance Pty Limited (DXF) formed the DXF tax consolidated group on
18 December 2008. DXF is the head entity of this tax consolidated
group. The entities in the DXF tax consolidated group entered into a
Tax Sharing Deed and Tax Funding Deed on 29 June 2009 (effective
18 December 2008).
In the opinion of the Directors, the Tax Sharing Deeds limit the joint and
several liability of the wholly-owned entities in the case of a default by
the head entity.
For each of the consolidated tax groups, the head entity and the
controlled entities continue to account for their own current and
deferred tax amounts. These notional tax amounts are measured as if
each entity in the tax consolidated group continues to be a stand alone
taxpayer in its own right pursuant to the Tax Funding Deed.
Under the Tax Funding Deed, the wholly owned entities fully
compensate the head entity for any current tax payable assumed and
are compensated by the head entity for any current tax receivable.
The funding amounts are determined by reference to the amounts
recognised in the wholly owned entities’ Financial Statements and are
recognised as current intercompany receivables or payables.
DEXUS PROPERTY GROUP Annual REPORT 2009 35