TRW & Co · Corporate, Capital & Tax
Global Minimum Tax (Pillar Two) in Singapore
Pillar Two in Singapore applies a 15% global minimum tax to multinational groups with revenue of EUR 750 million or more, through the MTT and DTT from financial years starting on or after 1 January 2025. This guide explains scope, the registration and filing timeline, safe harbours, incentive changes and the contracts and governance work the rules create.
Key pointFor a calendar-year group, IRAS registration was due by 30 June 2026 and the first GloBE and top-up tax returns are due by 30 June 2027, with payment by 31 July 2027, so first-year data and judgements must be documented now.
At a glance
Act passed 2024
The Multinational Enterprise (Minimum Tax) Act 2024 was passed on 15 October 2024, introducing the MTT and the Domestic Top-up Tax.
In force from 2025
Both top-up taxes apply to in-scope groups for financial years beginning on or after 1 January 2025, at a 15% minimum rate.
EUR 750m revenue test
Groups are in scope if consolidated revenue reached EUR 750 million in at least two of the four preceding financial years.
Six-month registration
Groups must register with IRAS and designate one Singapore filing entity within six months after their first in-scope year end.
No UTPR in Singapore
Singapore has implemented the income inclusion rule and a domestic top-up tax, but not the undertaxed profits rule, according to IRAS.
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What Pillar Two in Singapore means for groups
Pillar Two in Singapore is the country's implementation of the OECD/G20 global minimum tax, designed so that large multinational groups pay an effective tax rate of at least 15% in every jurisdiction where they operate. Singapore has adopted two top-up taxes under the Multinational Enterprise (Minimum Tax) Act 2024: a Multinational Enterprise Top-up Tax (MTT) and a Domestic Top-up Tax (DTT), both applying to financial years beginning on or after 1 January 2025.
For many groups, the practical effect is that tax incentives which brought Singapore's effective rate well below 15% no longer deliver the same benefit, because any shortfall is now collected as top-up tax, ideally in Singapore rather than abroad. For Singapore-headquartered groups, the MTT also reaches low-taxed subsidiaries overseas.
Pillar Two is often treated as a pure tax computation exercise, but it creates legal work too: registration and filing obligations with personal accountability, contracts that must allocate a new tax, M&A diligence and indemnities, and governance of data across the group. TRW & Co advises on these legal aspects and works alongside your tax advisers, who run the calculations and filings.
The legal framework for Pillar Two in Singapore
The Multinational Enterprise (Minimum Tax) Act 2024 was tabled on 9 September 2024 and passed by Parliament on 15 October 2024. It is supported by the Multinational Enterprise (Minimum Tax) Regulations 2024 and by IRAS guidance, principally the e-Tax Guide on the Multinational Enterprise Top-up Tax and Domestic Top-up Tax, whose second edition was published on 7 January 2026. The rules closely follow the OECD GloBE Model Rules, commentary and administrative guidance.
The Comptroller of Income Tax administers both taxes, with powers of assessment, collection and enforcement and offences modelled on the Income Tax Act 1947. Top-up tax sits alongside Singapore's ordinary corporate income tax; it does not replace it.
| Rule | What it does | Singapore status |
|---|---|---|
| Income Inclusion Rule (IIR), implemented as the MTT | Singapore parent entities pay top-up tax on low-taxed profits of group entities outside Singapore | In force for financial years beginning on or after 1 January 2025 |
| Domestic Top-up Tax (DTT), a domestic minimum tax | Tops up the effective rate of in-scope Singapore entities to 15%, so Singapore collects the top-up rather than a foreign jurisdiction | In force for financial years beginning on or after 1 January 2025 |
| Undertaxed Profits Rule (UTPR) | Backstop allowing jurisdictions to collect top-up tax not captured by an IIR | Not implemented in Singapore, per IRAS guidance |
Who is in scope
The MTT and DTT apply to multinational enterprise groups whose ultimate parent entity's consolidated financial statements show annual revenue of EUR 750 million or more in at least two of the four preceding financial years. The threshold is pro-rated for financial years shorter than twelve months. Groups below the threshold remain subject only to ordinary corporate tax.
The MTT
The MTT bites on a Singapore parent entity's ownership interests in group entities located outside Singapore, and in stateless entities, where those jurisdictions are low-taxed. It does not apply to the Singapore entities themselves, which are covered by the DTT. Foreign-parented groups are therefore usually concerned with the DTT, while Singapore-headquartered groups must handle both.
The DTT
The DTT applies to in-scope constituent entities located in Singapore, whoever owns the group. It does not apply to a purely domestic group with no foreign operations. Because it is designed as a qualified domestic minimum top-up tax, it allows Singapore to collect top-up tax on Singapore profits first, reducing the scope for foreign IIRs to collect it instead.
Excluded and special entities
Excluded entities, such as governmental entities, international organisations and non-profit organisations, are outside both taxes and have no administrative obligations. Investment entities and insurance investment entities follow special computational rules. Joint ventures and minority-owned entities have their own provisions, which matter for groups with significant joint ventures.
How top-up tax is calculated, in outline
The calculation follows the GloBE rules. For each jurisdiction, the group computes GloBE income, starting from financial accounting profit with prescribed adjustments, and adjusted covered taxes. Dividing covered taxes by GloBE income gives the jurisdictional effective tax rate. Where it is below 15%, the shortfall is applied to excess profit, which is GloBE income less a substance-based income exclusion linked to payroll and tangible assets.
Safe harbours can switch the calculation off. IRAS lists the Transitional CbCR Safe Harbour, the Simplified Calculations Safe Harbour and the QDMTT Safe Harbour as relevant; where one applies, the top-up amount for that jurisdiction is treated as nil. The Transitional UTPR Safe Harbour is not relevant because Singapore has not implemented the UTPR.
Pillar Two in Singapore turns a tax incentive into a timing and allocation question: who pays the 15%, where, and who in the group bears the cost.
The detailed computations are work for tax advisers and finance teams. The legal questions are how the results are allocated between entities, investors and counterparties, and who is accountable for getting the filings right.
Registration, filing and payment timeline
The compliance cycle is set out in the IRAS e-Tax Guide and on the IRAS registration page. The timeline below uses IRAS's example of a group with a 31 December financial year end whose first in-scope year ends on 31 December 2025.
- Confirm scope. Test the EUR 750 million threshold against the ultimate parent's consolidated statements for the four preceding years, and identify excluded and special entities.
- Designate the filing entity. Each group designates a single Singapore constituent entity as both the designated filing entity and the group filing entity. If the ultimate parent is in Singapore and not excluded, it takes that role.
- Register with IRAS. The group must register within six months after the end of its first financial year in which the MTT or DTT applies, which for the example group was 30 June 2026.
- Collect data. Build the data set for GloBE income, covered taxes and safe harbour tests from every jurisdiction, with controls and sign-offs.
- File the GloBE information return and top-up tax returns. Returns are generally due 15 months after year end, or 18 months for the transition year; for the example group, 30 June 2027.
- Pay. Payment is due no later than one month after the filing due date, which for the example group's transition year is 31 July 2027.
- Retain records. Keep records for the standard five-year period after the relevant year, and up to ten years for items needed in look-back calculations.
| Obligation | Rule | Example date |
|---|---|---|
| Registration and DFE designation | Within six months after first in-scope year end | 30 June 2026 |
| GloBE information return and MTT/DTT returns | 18 months after year end for the transition year (15 months thereafter) | 30 June 2027 |
| Payment of top-up tax | One month after the filing due date | 31 July 2027 |
Documents and data to assemble
The first filing cycle is where most groups discover gaps. Before the first returns for Pillar Two in Singapore are prepared, assemble at least the following, with clear ownership for each item.
- A group structure chart identifying every constituent entity, its jurisdiction, ownership percentages and any excluded, investment or joint venture status.
- Consolidated revenue figures for the four preceding years supporting the scoping conclusion.
- The board or management resolution designating the Singapore filing entity, and IRAS registration records.
- Jurisdictional data packs for GloBE income, covered taxes, deferred tax, payroll and tangible assets, reconciled to the accounts.
- Safe harbour workings for each jurisdiction, with the country-by-country report data they rely on.
- Intra-group agreements dealing with data provision, cost sharing and allocation of top-up tax.
- A memorandum recording judgements on uncertain points and the reasonable measures taken.
IRAS has said that for financial years 2025 to 2027 it will take a light-touch approach to penalties where a group shows it took reasonable measures to apply the rules correctly. That relief depends on evidence. Document your scoping decisions, data controls and the judgements made on uncertain points now, while the first returns are being prepared.
Incentives, the RIC and the 2026 side-by-side changes
Singapore has responded to the global minimum tax by reshaping its incentives. Budget 2024 announced the Refundable Investment Credit (RIC), listed among EDB incentives, which can fund up to 50% of qualifying expenditure on approved activities and can offset tax or be paid out in cash within four years. It is designed to be treated as a qualified refundable tax credit under the GloBE rules, which affects the effective tax rate far less than a conventional tax reduction.
In January 2026, the OECD/G20 Inclusive Framework released a side-by-side package. In outline, it allows groups parented in jurisdictions with a qualifying parallel regime, notably the United States, to be exempt from the IIR and UTPR for financial years beginning on or after 1 January 2026, while domestic minimum taxes such as Singapore's DTT continue to apply. The package also introduced a substance-based tax incentive safe harbour.
Singapore has confirmed that the DTT continues to apply to all in-scope groups, including US-parented groups. After a public consultation in June 2026, Parliament passed the Finance (Income Taxes) Bill 2026 on 6 October 2026, amending the Act to implement the side-by-side safe harbour, which exempts qualifying US-parented groups from the MTT, and to provide for the exchange of GloBE information returns with other jurisdictions. Commencement dates and any further safe harbour changes, including the substance-based tax incentive safe harbour, should be checked before relying on them. Our post on tax incentive strategy discusses how incentives are evolving.
The legal workstreams Pillar Two creates
Contracts and cost allocation
Top-up tax is assessed on the filing entity or the parent, but the economic cause lies in particular subsidiaries. Groups need intra-group agreements that allocate top-up tax, data obligations and the cost of compliance, consistent with transfer pricing and local law. Joint venture and shareholder agreements should address who bears top-up tax triggered by a partner's group status. See our page on transfer pricing coordination.
M&A and financing
Acquisitions can bring a target into or out of scope, change which entity files, and import historic positions that affect future top-up tax. Due diligence should cover Pillar Two in Singapore and abroad, and share purchase agreements should include tailored tax covenants and indemnities. Lenders may ask for Pillar Two representations and covenants. Our M&A support team and our post on M&A tax diligence cover the deal side.
Governance and accountability
Boards should know who owns the Pillar Two process, what assurance they receive and how judgements are escalated. The penalty framework, and the need to show reasonable measures, make this a governance issue as much as a tax one. Our corporate governance advisory team helps design those reporting lines.
Risks and common mistakes
Missing registration or misidentifying the filing entity
Registration is due within six months after the end of the first in-scope year, so for calendar-year groups the first deadline has already passed. Groups that assumed they were out of scope, or that a foreign parent's filings covered Singapore, may be late. The single designated entity must be a Singapore constituent entity, and the ultimate parent where it is in Singapore. Check registration status now, regularise any gap with IRAS promptly and record the reasons.
Assuming incentives still deliver the same benefit
Concessionary rates and exemptions that reduce Singapore's effective rate below 15% may simply move tax from the corporate return to the DTT return. Business cases built on pre-Pillar Two effective rates can be badly wrong. Re-model incentive benefits under the GloBE rules, consider whether qualified refundable credits such as the RIC are available, and revisit commitments in incentive agreements and investor materials.
Poor data and undocumented judgements
GloBE calculations need data that ordinary statutory accounts do not capture, from deferred tax detail to payroll and tangible asset information by jurisdiction. Gaps are often filled with estimates that no one records. When IRAS or a foreign authority reviews the return, the group cannot show how numbers were derived. Build a documented data process, reconcile it to the accounts and keep the records for the full retention period.
Contracts silent on top-up tax
Existing joint venture, shareholder, service and acquisition agreements rarely mention top-up tax. Disputes arise when one party's group status triggers a cost that falls on a shared entity, or when a buyer discovers inherited exposure. Review key agreements for tax gross-up, indemnity and cost-sharing provisions, and amend them on renewal. Our tax disputes page explains how challenges with IRAS proceed if positions are questioned.
Treating the rules as settled
The GloBE framework continues to evolve through OECD administrative guidance, the side-by-side package and domestic amendments. A position that was correct for 2025 may change for 2026. Assign someone to track IRAS and MOF updates, review safe harbour eligibility each year, and avoid hard-coding assumptions into long-term contracts without review clauses.
Cross-border coordination and the TRW network
Pillar Two is inherently multi-jurisdictional. A group headquartered in the UK, which has its own multinational and domestic top-up taxes, will interact with Singapore's DTT on its Singapore subsidiaries. Groups with UAE operations should check how the UAE's own minimum tax measures interact with Singapore's. Groups based in Bangladesh or China must check whether and how their home jurisdictions have adopted the rules, and what that means for their Singapore entities.
Information returns are designed to be exchanged between tax authorities, so inconsistent positions across countries are more visible than before. Treaty questions, permanent establishment allocations and transfer pricing all feed into the jurisdictional calculations. Our page on double tax treaty questions covers the treaty side.
TRW & Co coordinates the legal aspects of Pillar Two in Singapore with our offices in London, Dubai, Dhaka and China and with local advisers, so that contracts, governance and filings tell a consistent story across the group.
How TRW & Co helps with Pillar Two in Singapore
Scope and registration review
We review the legal analysis behind scoping, excluded entities and filing entity designation, and help regularise late registrations with IRAS alongside your tax advisers.
Intra-group agreements
We draft cost and top-up tax allocation agreements, data sharing protocols and service arrangements that work under Singapore and foreign law.
Transactions
We cover Pillar Two in diligence, tax covenants, indemnities and completion mechanics for acquisitions, disposals, joint ventures and financings.
Incentive agreements
We review incentive and grant documentation, including RIC arrangements, for conditions, clawbacks and interaction with the global minimum tax.
Board governance
We help boards set ownership, assurance and escalation for Pillar Two decisions, and document the reasonable measures IRAS expects.
Reviews and disputes
We advise on IRAS queries and challenges to top-up tax positions. Where representation before a Board or court requires it, we work alongside Singapore-qualified counsel.
See all our practice areas and our page on Singapore tax structuring.
Checklist for decision-makers
- Have we confirmed whether the group meets the EUR 750 million test in two of the four preceding years?
- Is the group registered with IRAS and has a single Singapore designated filing entity been appointed?
- Do we know our first GloBE information return, top-up tax return and payment dates?
- Have we tested each safe harbour for each jurisdiction and recorded the result?
- Have incentive benefits been re-modelled under the 15% minimum, including any RIC?
- Do intra-group, joint venture and transaction agreements allocate top-up tax and data duties?
- Is there board-level ownership and documentation of reasonable measures for 2025 to 2027?
- Is someone tracking the side-by-side amendments and later IRAS guidance?
To discuss the legal side of Pillar Two in Singapore for your group, contact TRW & Co at info@trw.co.
Frequently asked questions
01Does Pillar Two apply to my group in Singapore?
It applies if your multinational group's ultimate parent reports consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years, for financial years beginning on or after 1 January 2025. The threshold is pro-rated for short years. Wholly domestic groups are not subject to the DTT, and excluded entities such as governmental entities, international organisations and non-profit organisations fall outside both taxes. Investment entities follow special rules, so fund structures need specific review.
02What is the difference between the MTT and the DTT?
The MTT implements the income inclusion rule: a Singapore parent entity pays top-up tax on low-taxed profits of group entities outside Singapore. The DTT is a domestic minimum top-up tax on in-scope entities located in Singapore, whoever owns the group, bringing their effective rate up to 15% so that Singapore, rather than another country, collects the top-up. Foreign-parented groups are mainly affected by the DTT; Singapore-headquartered groups deal with both.
03When must we register and file?
Under IRAS guidance, a group must register and designate a single Singapore filing entity within six months after the end of its first financial year in which the MTT or DTT applies. GloBE information returns and top-up tax returns are due 15 months after year end, or 18 months for the transition year, with payment one month after the filing due date. For a 31 December 2025 year end, that means registration by 30 June 2026, filing by 30 June 2027 and payment by 31 July 2027.
04Has Singapore introduced the undertaxed profits rule?
No. IRAS guidance states that Singapore has not implemented the UTPR, which is why the transitional UTPR safe harbour is not relevant in Singapore at present. Groups may still be affected by the UTPR as applied in other jurisdictions where they have entities. The OECD's January 2026 side-by-side package also changes how the IIR and UTPR apply to groups parented in qualifying jurisdictions such as the United States.
05How does the side-by-side package affect Singapore?
The package, released by the OECD/G20 Inclusive Framework in January 2026, exempts groups headquartered in jurisdictions with a qualifying parallel regime from the IIR and UTPR for financial years beginning on or after 1 January 2026, while domestic minimum taxes like Singapore's DTT continue to apply. Singapore has confirmed the DTT continues, and Parliament passed amendments to the Act on 6 October 2026 to implement the side-by-side safe harbour. Check commencement dates and the current position before relying on it.
06What is the Refundable Investment Credit?
The RIC was announced in Budget 2024 and is awarded case by case by the Economic Development Board and Enterprise Singapore. It can support up to 50% of qualifying expenditure on approved activities, such as new productive capacity, headquarters functions, R&D and decarbonisation, and can offset corporate tax or be paid in cash within four years. It is designed to qualify as a refundable tax credit under the GloBE rules, which has a much smaller effect on the effective tax rate.
07How does TRW & Co help with Pillar Two?
TRW & Co advises on the legal side: scoping analysis, filing entity designation, intra-group allocation agreements, joint venture and M&A terms, incentive agreements, board governance and IRAS queries or disputes. We work alongside your tax advisers, who run GloBE calculations and prepare returns, and we do not act as a tax agent. Where Board of Review or court representation is required, we work alongside Singapore-qualified counsel. Contact info@trw.co.
Sources and official materials
- IRAS e-Tax Guide: Multinational Enterprise Top-up Tax and Domestic Top-up Tax — Scope, safe harbours, registration, filing, payment and penalties
- Registration for MTT and DTT (IRAS) — How and when in-scope groups register
- GloBE Rules and Domestic Top-up Tax (IRAS) — IRAS overview of the global minimum tax in Singapore
- Multinational Enterprise (Minimum Tax) Act 2024 — Statute implementing the MTT and DTT
- Incentives and schemes (EDB) — EDB incentives including the Refundable Investment Credit
General information only, current as at 20 October 2026. It is not legal advice and does not create a lawyer–client relationship. Singapore law and regulatory practice change; check current official sources and take advice on the facts of your matter.
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