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Advance Ruling Case No. 76 — what constitutes assessable profits derived from “intra-group lending transactions” of a qualifying corporate treasury center (QCTC)
It may be reasonable to assume in this case that the applicant will, apart from the borrowing from external financial institutions for on-lending to its associated corporations, also have other borrowing of money from and lending of money to its associated corporations as a business. Otherwise, the applicant may not be regarded as carrying on an intra-group financing business and, if so, the interest income from the on-lending would not be eligible for the 8.25% concessionary tax rate.
In any case, what constitutes an “intra-group financing business” on account of the frequency, scale and regularity, etc. of the intra-group borrowing and lending activities of a person would still be fact specific.
Clients who wish to explore their eligibility for the preferential tax regime for QCTCs can contact their tax executive.