Extension of SLIP & Half SLIP
Concessions under Hotels Aid Act
1. The Interim Government has enacted Decree No 28 of 2000 renewing the Short Life Investment Packages ("SLIP and "Half-SLIP"") available under the Hotels Aid (Amendment) Act 1996. The packages are now available until 30 June 2003.
2. The renewal will be of interest to clients in tourism, finance, land development, construction and related services.
3. The SLIP package was first introduced in 1996. As originally conceived, it extended various concessions to hotel projects involving an investment of $40 million or more (excluding land).
4. In 1999 the Government introduced the "Half-SLIP" scheme to cater for investments with a lower investment threshold of $10 million.
5. Hotel investors may obtain concessions under the legislation for all or any of the following:
• total income tax exemption on income derived from the operation of the hotel for 10 years or 20 years (depending on whether the investment meets the Half-SLIP or SLIP threshold, respectively)
• a special depreciation allowance (equal to the amount of the capital investment) which can be claimed in any one of the eight years following the tax-free period and
• to set off hotel operation losses against income from non-hotel operation sources or to carry forward such losses for set-off against total income for the next six years in succession.
6. Successful applicants are required to submit annually to the Minister for Tourism audited accounts and such relevant information as s/he may require.
7. The package is awarded to the hotel owner and is not transferable. The main Act provides that if the hotel is "sold or to be sold" the remaining benefits may only be transferred with the Minister's approval
8. A curious aspect of SLIP (not corrected in the amendment) means that it requires an applicant to be a "company", which potentially limits the flexibility available in using other preferred investment structures.