Understanding BEPS Pillar Two
DTT and what it means for you
6 February 2023 | 3 minute read
Insights
It has been more than a year since the Singapore government first announced that a domestic minimum tax was being considered.
In the 2023 Budget, it was further announced that Singapore plans to implement the Global Anti-Base Erosion rules and a domestic top-up tax (DTT) for in-scope businesses from the financial year beginning on or after 1 January 2025, subject to international developments.
What should taxpayers do if they are approached for feedback?
Although the government is bound by international rules in terms of how DTT is designed, it is possible that there is some leeway to facilitate implementation and administration.
Businesses should therefore be frank and forthcoming with their feedback, particularly if they foresee practical issues in implementation and challenges in data gathering and meeting timelines.
The takeaway
Compliance with the Pillar Two rules is expected to be a massive data gathering and compliance exercise for in-scope MNEs, even if their Singapore tax liability remains unchanged eventually. It is therefore in their interest to proactively identify and feedback to the government any practical issues in data gathering or reporting, implementation and meeting timelines so that these may be addressed, to the extent possible, before the rules take effect in 2025.
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