Effective from 1 January 2025, Singapore will implement a new tax system to enforce a minimum effective tax rate of 15 percent on qualifying profits, in accordance with the BEPS Pillar 2 initiative. This will apply to multinational enterprise (MNE) groups with an ultimate parent entity (UPE) that has recorded annual revenue of EUR 750 million or more in their consolidated financial statement in at least two of the four preceding financial years, subject to certain exclusions.

UPEs of such MNE groups must notify the Singapore tax authorities of their liability to register under the new act and file tax returns on their top-up tax liability.

Additionally, all registered MNE groups must file a GloBE Information return (GIR) with Singapore unless it is filed with another jurisdiction. Even if filed elsewhere, an annual GloBE notification must be submitted to Singapore tax authorities to inform them of the foreign UPE's identity and the jurisdiction where the GIR is filed.

Pillar Two brings unprecedented changes to the global tax system and is rapidly evolving around the globe. A&M tax professionals are ready to guide businesses on analysing the rules, extracting relevant data and meeting their obligations under new Singapore tax system.