Singapore has implemented its Base Erosion and Profit Shifting (“BEPS”) 2.0 Pillar Two minimum tax regime under the Multinational Enterprise (Minimum Tax) Act 2024 (“MMT Act”), effective for financial years beginning on or after 1 January 2025. 

 

Key Taxes Introduced

Under the MMT Act, two top-up taxes have been introduced:

  • Multinational Enterprise Top-up Tax (“MTT”), also known as the Income Inclusion Rule (“IIR”), which applies to low-taxed profits of group entities located outside Singapore; and
  • Domestic Top-up Tax (“DTT”), which applies to low-taxed profits of group entities located in Singapore, allowing Singapore to collect any top-up tax arising domestically.

These measures are aligned with the Global Anti-Base Erosion (“GloBE”) Model Rules under BEPS 2.0 Pillar Two and are designed to ensure that large multinational enterprise (“MNE”) groups are subject to a minimum effective tax rate of 15% on a jurisdictional basis.

 

Who Is In-Scope

An MNE group will fall within the scope of the MMT Act if:

  • the group has consolidated annual revenue of €750 million or more in at least two of the four preceding financial years; and
  • the group has at least one Constituent Entity, joint venture, or reverse hybrid entity incorporated, registered, or located in Singapore.

 

Registration Timeline

All in-scope MNE groups are required to register with the Inland Revenue Authority of Singapore (“IRAS”) for:

  • MTT (where applicable) and DTT; and
  • filing of the GloBE Information Return (“GIR”).

Registration is due within six months after the end of the first financial year to which the MMT Act applies. For MNE groups with a 31 December 2025 year-end, the registration deadline will be 30 June 2026.

IRAS has announced that the registration process is expected to commence from May 2026.

The Ultimate Parent Entity (“UPE”) is responsible for the registration. However, the UPE may appoint a Singapore Constituent Entity or a local tax agent to register on its behalf (a letter of authorisation is required).

IRAS will process the registration within one month upon receipt of complete information. Upon submission, the UPE or its appointed local tax agent will receive an email notification. Once the registration is approved, IRAS will issue notification letters to the in-scope entities in Singapore.

 

Surcharge for Failure to Register

Failure to register may attract a 10% surcharge on any Top-up Tax payable.

 

What MNE Groups Should Do Now

While registration is still some time away, affected groups should already be:

  • identifying in-scope entities in Singapore
  • assessing Pillar Two exposure
  • preparing data for registration and GIR filing

Get in touch with one of our specialists for more information

Koh Puay Hoon
Partner & Head of Tax
+65 6594 7820
[email protected] 
Law Wei Lin
Partner, International Tax
+65 6715 1164
[email protected]
Candisce Teo
Senior Manager, International Tax
+65 6715 1162
[email protected]