思想引领

近十年来，中国内地境外地产投资的起伏，在国际房地产界掀起了不小的波澜。最近两年，境外房地产主流投资活动已 从收购转向处置。2019年，中国内地境外地产总投资额较2017年峰值下降79%。
 

Many business owners (private sector, public sector and public listed) have traditionally owned their real estate. These typically include factory operations coupled with offices and warehouses. While, in some cases, the real estate may have become non-core, in other cases such real estate is essential for the business operations. 

Arising from the need to social distance to mitigate the spread of COVID-19, the question that arises in the minds of many will be the state of the co-working industry in a possible new epoch. 

One of the greatest uncertainties we face today surrounds the trade-off between minimizing the human cost from the coronavirus and restarting the economy.  Much of the world economy remains shut down, and consequently, economic distress arising from the coronavirus crisis has been pervasive.  And rightfully, governments around the world have announced an unprecedented program of stimulus, support, rescue and regulatory relief in response to the economic impact of the effort to combat the pandemic.
 

Business Trusts may invest in a number of Holding companies/ SPVs and it is likely that there may be surplus funds available in one Holding company/ SPV which can be productively lent to another Holding company/ SPV.  Considering provisions of Section 2(22)(e), such loans may have adverse tax implications.  Provisions of Section 2(22)(e) do not apply to a listed company or its subsidiary.  Since units of a Business Trust shall be listed and the Holding company/ SPV is its subsidiary, exemption from Section 2(22)(e) should be available to such Holding companies/ SPVs as they are available to a listed company or its subsidiary. 

The Finance Bill 2020 proposes to levy tax on the dividend paid by InvITs/ REITs to the unitholders in the hands of the unitholders, which was until this proposed amendment exempt from tax. An efficient tax structure provided under the Income Tax Act 1961 enabled the successful listing of two InvITs in 2017, two privately placed but listed InvITs and India’s first REIT in April 2019 which attracted investment from large long-term foreign investors and also domestic institutional investors. 

We hereby state that pursuant to declaration of COVID-19 as a ‘Pandemic’ by the World Health Organisation (WHO), Government Of India (GOI) has invoked the provisions of Section 2 of the Epidemic Disease Act, 1897 in order to curb the spread of COVID-19. Further, as a precautionary measure, as required to arrest the spread, various State Governments have ordered complete shut-down of shopping centres, malls, multiplexes/cinema halls, hotels, industrial and warehouse parks  and  private / corporate offices except those providing essential services from March 20, 2020 onwards. This has been further extended due to complete lockdown by Central Government across India until Mid April, 2020, with a possibility of further extension as exact time frame for controlling this Pandemic cannot be defined. 
 

Over the past 2 months, COVID 19 has progressed from a regional outbreak to an acclaimed pandemic. This has created havoc not only in the day to day lives of people but also in terms of the business operations of all scales.  With a view to curb further contagion, Governments across nations have issued travel advisories and have imposed restrictions, besides localised measures like shut-down of malls, multiplexes/cinema halls, large gatherings etc., to name a few. 

The income tax framework for Business Trusts (BTs) was first introduced in Finance (No. 2) Act, 2014.  Further amendments were undertaken in Finance Act, 2015 and Finance Act, 2016.  The key principle that underpinned this framework was to provide for a single level of taxation on income from the underlying assets – this tax was to be assessed on the asset owning SPV’s income; thereafter, such income when distributed by the SPV to the BTs and by the BTs to its unitholders, would not attract any further tax. 

Over the past 2 months, COVID 19 has progressed from a regional outbreak to a pandemic. This has created havoc not only in the day to day lives of people but also in terms of the business operations of all scales.  Real Estate industry which was already reeling under the slowdown pressures is now staring at a complete shutdown. Even big business houses which have the ability to sustain this, are now creating reserves for the rainy day, with no visibility of the end of this phase. The employment and livelihood of the real estate workers at every level have also been adversely impacted due to the sudden slowdown of real estate construction.