This will help businesses adapt to the upcoming minimum tax framework under BEPS 2.0, notes professional services firm
Deloitte has proposed that Singapore consider allowing businesses to pay upcoming domestic and multinational top-up taxes in interest-free instalments, to help multinationals manage the transition to the new minimum tax framework under the Global Anti-Base Erosion (GloBE) Model Rules. This proposal was part of Deloitte’s Budget 2025 wish list issued on December 26.
From 2025, qualifying multinational enterprises (MNEs) operating in Singapore will be required to pay a minimum effective tax rate of 15% on their group profits, in line with Pillar Two of the Base Erosion and Profit Shifting (BEPS) 2.0 framework. This will apply to MNEs with consolidated annual revenues of at least 750 million euros (S$1.1 billion) over two of the preceding four financial years. The tax will be implemented through a multinational enterprise top-up tax (MTT) and a domestic top-up tax (DTT) to ensure that MNEs meet the global minimum tax rate of 15%.
Deloitte’s proposal to offer interest-free instalments would help multinationals better manage their cash flow during the transition to this new tax regime.
In addition, Deloitte recommended enhancements to the Refundable Investment Credit (RIC) scheme, which was introduced by Singapore in Budget 2024 to encourage substantial investments in the country. Deloitte suggested expanding the RIC to include offshore and regional decarbonisation projects initiated from Singapore. Furthermore, they proposed raising the support rate to 70% and allowing the RIC to be offset against other taxes, such as property and carbon taxes.
Other recommendations included streamlining corporate tax policies, easing restrictions on the disposal of shares in property-holding companies, and extending grants for energy-efficient equipment and sustainability reporting. These measures aim to improve business flexibility, support sustainability efforts, and attract top talent to Singapore.
