Starting from January 1st, 2025, Singapore will implement significant changes to its corporate tax regime. These changes align with the international guidelines in Pillar 2 of the OECD. The goal is to establish a global minimum tax rate of 15% for large multinational enterprises and to prevent base erosion and profit shifting to low-tax jurisdictions.
The Global Base Erosion Rules (GloBE) will include the Income Inclusion Rule, the Undertaxed Profits Rule, and the National Top-Up Tax. The Singaporean government will introduce a National Top-Up Tax to raise the effective tax rate for multinational conglomerates to 15%. This is part of a global effort to harmonize corporate tax rates and ensure fair competition. Authorities will also review and update existing tax incentives to encourage investments in climate-related projects and promote sustainable business practices. Singapore joins other countries like Uruguay and Brazil in implementing these changes.
In parallel, Singapore will advance the digitalization of its tax processes that will be done through the mandatory adoption of InvoiceNow, the national e-invoicing network based on the PEPPOL framework. From May 1st, 2025, companies registered for GST can opt to use this system. From November 1st, 2025, it will be mandatory for new companies to register for GST. This initiative aims to enhance invoicing efficiency, speed up payment cycles, and reduce paper usage. It aligns with global trends towards digitalization and tax transparency. Implementing this system will position Singapore in line with global developments in these areas.
These reforms reflect Singapore’s commitment to international tax regulations. They also show its adaptation to a constantly evolving global economic environment. Companies operating in Singapore will need to prepare to comply with these new requirements. This will ensure a smooth transition and help maintain their competitiveness in the international market.
If you need assistance with tax compliance in Singapore or other Asian countries like Hong Kong and India, don’t hesitate to contact Auxadi for fiscal process management.
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All information contained in this publication is up to date on 2024. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.