Intercounbix Indonesia

Shaping a sustainable future

Singapore to implement Pillar 2 tax rules from 2025

IBX – Quoting from, Singapore will implement the Global Anti-Base Erosion (GloBE) Rules, that is, Income Inclusion Rule and Undertaxed Profits Rule, and Domestic Top-up Tax from January 1, 2025.

The announcement was a part of the country’s 2023 Budget, which finance minister Lawrence Wong, presented before Parliament today.

The international tax community is deliberating on a global minimum effective tax rate of 15 percent for large MNE groups (Pillar 2), as proposed by the OECD under a two-pillar solution to tackle taxation of the digital economy. Some key parameters of Pillar 2 have only been finalised this year while others remain under discussion at the international level.

The EU recently announced its plans to implement Pillar 2 in phases starting effectively from 2024. Several other jurisdictions have proposed to follow suit.

Delivering the Budget, the finance minister told Parliament: “Given these developments, I intend to implement Pillar 2 from January 1, 2025, as part of the broader international move to align minimum global corporate tax rates for large MNE groups.”

The Minister said that the government would implement a Domestic Top-up Tax, which will top up the MNE groups’ effective tax rate in Singapore to 15 percent. “At the same time, we will review and update our broader suite of industry development schemes to ensure that Singapore remains competitive in attracting and retaining investments,” the minister said.

Wong told the Parliament that the government will continue to monitor international developments. “If there are additional delays, we will adjust our implementation timeline,” the minister said.

“We will continue to engage companies and give them sufficient notice, well ahead of any changes to our tax rules or schemes,” the minister added.