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February 24, 2023

Singapore plans to implement GloBE Rules and Domestic Top-up Tax as of 1 January 2025

  • On 14 February 2023, Singapore announced in its Budget 2023 that it plans to implement the Global Anti-Base Erosion (GloBE) Rules (i.e., Income Inclusion Rule (IIR) and Undertaxed Profits rule (UTPR)) and Domestic Top-up Tax (DTT) for businesses with financial years starting on or after 1 January 2025.

  • A number of existing incentive regimes were extended under the announcement, signaling that tax incentive regimes in Singapore will continue to remain.

  • Companies with a presence in Singapore should take this timeline into account when evaluating their investment decisions and realigning their supply chains, particularly those with a presence in jurisdictions that have announced their intention to implement GloBE rules effectively from 2024.

  • Planning opportunities for multinational enterprises (MNEs) include engaging with authorities for existing/new incentive packages to be Base Erosion and Profit Shifting (BEPS) Pillar Two effective.

Executive summary

Singapore has announced its plans to implement the GloBE Rules and DTT1 with dates of entry into effect:

  • IIR & DTT: Fiscal years starting on or after 1 January 2025

  • UTPR: Fiscal years starting on or after 1 January 2025 (at the earliest)

The Singapore Government will continue to monitor the international developments and adjust its implementation timeline as needed if there are delays internationally. Companies may also expect adequate notice ahead of any rules becoming effective.

Detailed discussion

This Alert summarizes key measures of the Singapore Budget announcement, as well as potential issues and planning considerations that businesses should be aware of.

Domestic Top-up Tax

The DTT will top-up an MNE group’s effective tax rate in Singapore to 15%. The DTT will apply to MNE groups operating in Singapore that have annual revenues of at least €750 million, as reflected in the consolidated financial statements of the ultimate parent entity.

Timing of implementation

The DTT will be implemented for fiscal years starting on or after 1 January 2025.

While it is noted the Organisation for Economic Co-operation and Development (OECD) has provided in their earlier statementthat the UTPR should be implemented one year after the IIR, the Budget announcement seems to suggest that the IIR and UTPR will be implemented in 2025 (this will need to be validated when the legislation is released).

The Singapore Government will continue to monitor the international developments and adjust its implementation timeline as needed if there are delays internationally. Further, it would engage businesses and provide them with sufficient notice ahead of any rules becoming effective.

Legislation of GloBE rules and DTT

The legislation has not been released. The Budget 2023 announcement alone should not be considered nor constitute substantive enactment of the GloBE Rules and DTT.


  • With the implementation planned for 2025, it appears to indicate that there are broader policy considerations (e.g., businesses value certainty on the tax regime, and rushing the implementation of new rules could be costly and risky to stakeholders) and it also is an acknowledgement of the feedback gathered from MNEs that additional time is required to prepare for and comply with the GloBE rules. This also gives the Singapore Government more time to review and develop its suite of tax and non-tax tools to attract investments into the country.

  • In addition to the extension of a number of existing incentive regimes,Singapore’s Deputy Prime Minister and Minister of Finance, said that Singapore would “review and update its broader suite of industry development schemes to ensure that Singapore remains competitive in attracting and retaining investments.” This is a welcomed indication that tax incentive regimes in Singapore will continue to remain.

  • The transitional country-by-country reporting safe harbor rules apply for a stipulated period of time and will expire thereafter. Its validity will not be extended notwithstanding that Singapore will only implement the GloBE rules and DTT in 2025.

Considerations for foreign MNEs with Singapore operations

Opportunities that companies could avail of include a possible reprieve from complying with the Singapore DTT requirements in 2024. Whether these foreign MNEs will ultimately have a top-up tax liability in relation to Singapore operations will depend on the profile of that specific foreign MNE group.


The implementation of the GloBE rules and DTT in 2025 may give Singapore MNEs the initial impression that they can temporarily scale back the preparation for GloBE rules. However, it should be noted that various jurisdictions (such as South Korea, Switzerland, and the United Kingdom) have announced their intention to implement the GloBE rules effectively from 2024. Therefore, Singapore MNEs may still be impacted by the GloBE rules in 2024 if they have presence in such jurisdictions.

Organizations in Singapore that are planning to apply or those with existing tax incentives should consider strategies and formulate options for their incentive package.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Solutions LLP, International Tax and Transaction Services, Singapore

Ernst & Young Solutions LLP, Business Incentives Advisory, Singapore

Ernst & Young LLP (United States), Singapore Desk, New York

Ernst & Young LLP (United States), ASEAN Tax Desk, New York

Ernst & Young LLP (United States), Asia Pacific Business Group, New York

Ernst & Young LLP (United States), Asia Pacific Business Group, Chicago



  1. Formerly referred to as a Minimum Effective Tax Rate (METR).

  2. Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy issued by the OECD/G20 Inclusive Framework on 8 October 2021.

  3. Such as the Investment Allowance, Pioneer incentive, Development and Expansion Incentive, the Intellectual Property Development Incentive, etc.


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