Singapore has quietly enacted one of the most significant shifts in its corporate tax landscape in decades. The Multinational Enterprise (Minimum Tax) Act 2024 (MMT Act) — Singapore’s implementation of the OECD’s Pillar Two Global Anti-Base Erosion (GloBE) rules — came into force for financial years starting on or after 1 January 2025. With IRAS opening registration in May 2026 and the first registration deadline falling on 30 June 2026 for groups with a 31 December 2025 financial year-end, in-scope MNE groups must act now.
This guide explains how Singapore’s Global Minimum Tax works, which businesses are affected, what the registration process entails, and how to prepare before the deadline.
What Is the Global Minimum Tax (Pillar 2)?
Pillar Two is an initiative of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS 2.0). Its central objective is to ensure that large multinational enterprise (MNE) groups pay a minimum effective tax rate (ETR) of 15% on profits in every jurisdiction where they operate, regardless of local tax incentives or planning arrangements.
Singapore’s domestic implementation — the MMT Act — introduces two top-up tax mechanisms:
- Multinational Enterprise Top-up Tax (MTT) — also known as the Income Inclusion Rule (IIR). This applies to the low-taxed profits of overseas group entities, collected at the level of the Singapore parent or intermediate holding company.
- Domestic Top-up Tax (DTT) — a qualifying domestic minimum top-up tax that applies to low-taxed profits of Singapore-based group entities. By applying DTT domestically, Singapore can collect the top-up tax itself, rather than ceding that revenue to a foreign parent jurisdiction under its IIR.
Both taxes are administered by the Inland Revenue Authority of Singapore (IRAS).
Who Is Affected?
The MMT Act applies to MNE groups that meet both of the following conditions:
- Annual consolidated group revenues of at least €750 million in at least two of the four financial years immediately preceding the relevant financial year
- At least one group entity (whether a parent, intermediate holding company, or subsidiary) is located in Singapore
Importantly, the €750 million threshold is assessed at the group level — not the Singapore entity level. A Singapore subsidiary of a large global group with revenues well above €750 million will be in scope even if the Singapore entity itself is relatively small.
Who Is Not Affected?
Businesses below the €750 million revenue threshold are entirely outside the scope of the MMT Act. Purely domestic Singapore companies with no foreign group entities are similarly unaffected. Singapore’s standard corporate income tax rate of 17% is above the 15% GloBE minimum, which means that most Singapore-sourced profits will not generate a top-up tax liability — the DTT is primarily relevant where Singapore profits benefit from tax incentives or exempt income that brings the ETR below 15%.
If your group is below the threshold, you do not need to register or file. However, you should monitor your group’s global revenues annually, as breaching the threshold in future years will bring you into scope.
How Does the ETR Calculation Work?
The effective tax rate (ETR) under GloBE is calculated on a jurisdictional basis — all group entities in a single jurisdiction are aggregated. The formula is:
ETR = Adjusted Covered Taxes ÷ GloBE Net Income
If the ETR in any jurisdiction falls below 15%, a top-up tax is imposed to bring the group’s total tax in that jurisdiction up to the 15% minimum. The top-up tax is typically collected by the ultimate parent entity’s jurisdiction (via IIR), unless a qualifying domestic minimum top-up tax (such as Singapore’s DTT) has been enacted in the low-tax jurisdiction, in which case the local QDMTT takes priority.
Substance-Based Income Exclusion
The GloBE rules include an important carve-out known as the Substance-Based Income Exclusion (SBIE). Under this carve-out, a portion of a jurisdiction’s GloBE income is excluded from the top-up tax calculation based on the group’s payroll costs and tangible assets (such as property, plant and equipment) in that jurisdiction. The SBIE reduces the effective impact of Pillar Two on groups with genuine economic substance — and reinforces the value of Singapore’s position as a hub for real operational activity.
Registration: What You Must Do Before 30 June 2026
IRAS commenced online registration for the MMT Act in May 2026. The registration deadline is within six months after the end of the group’s first financial year to which the MMT Act applies.
For most groups operating on a calendar year (FYE 31 December 2025), the first in-scope financial year is 1 January 2025 to 31 December 2025, and the registration deadline is therefore 30 June 2026. Groups with non-December year-ends should calculate their own deadlines accordingly.
What the Registration Requires
In-scope groups must register via the IRAS e-Services portal. The registration form requires information on:
- The identity of the Ultimate Parent Entity (UPE) and its jurisdiction of tax residence
- The Singapore entities within the MNE group and their roles (intermediate parent entity, constituent entity, etc.)
- Whether the group will be subject to MTT, DTT, or both
- The group’s first in-scope financial year and financial year-end date
If the Singapore entity is not the UPE but is a constituent entity of a larger group, it still has registration obligations in Singapore. The designated filing entity for Singapore purposes must be identified.
Filing and Payment Obligations
Registration is only the first step. In-scope groups will subsequently be required to:
- File a GloBE Information Return (GIR) — a standardised return setting out the GloBE calculations for each jurisdiction in the group
- File a Singapore Top-up Tax Return with IRAS
- Pay any MTT or DTT liability to IRAS within the prescribed timelines
IRAS has published detailed guidance and an e-Tax Guide on the MMT Act, which in-scope groups and their tax advisers should study carefully. Transitional Safe Harbours — including the Transitional CbCR Safe Harbour — may reduce compliance burden for the first three years of Pillar Two implementation for groups that qualify.
Interaction with Singapore’s Existing Tax Incentives
Singapore offers a range of corporate tax incentives — including those under the Global Trader Programme, Finance and Treasury Centre scheme, and the 13O and 13U family office tax incentives — many of which reduce the effective tax rate below 17% and potentially below 15%. For MNE groups within scope of the MMT Act, such incentives may generate a DTT liability in Singapore.
This does not mean incentives are no longer valuable. The SBIE carve-out, Transitional Safe Harbours, and the overall group ETR position must all be considered holistically. However, in-scope groups should model the full Pillar Two impact when evaluating Singapore incentive structures — and factor this into planning alongside Singapore’s transfer pricing documentation requirements and foreign-sourced income exemption rules.
Practical Steps for In-Scope Groups in Singapore
If your MNE group is in scope, here is what you should be doing now:
- Assess scope: Confirm whether your group’s consolidated revenues exceed €750 million in at least two of the past four financial years, and identify all Singapore constituent entities.
- Register with IRAS: Complete the online registration via the IRAS e-Services portal before 30 June 2026 (for December year-end groups) or within six months of your first in-scope FYE.
- Model your ETR by jurisdiction: Work with your tax advisers to calculate the jurisdictional ETR across all territories where the group operates, identifying potential top-up tax exposures.
- Assess Transitional Safe Harbours: Determine whether the Transitional CbCR Safe Harbour or other transitional provisions apply to reduce compliance complexity in the initial years.
- Review Singapore incentives: Model the impact of any Singapore tax incentives on DTT exposure, and consider whether the SBIE carve-out adequately shelters Singapore income.
- Prepare systems for GIR filing: The GloBE Information Return requires substantial data on each jurisdiction’s income, taxes, payroll, and tangible assets — begin data collection and system preparation early.
Conclusion
Singapore’s Global Minimum Tax is not a distant regulatory concern — for in-scope MNE groups, the registration clock is already ticking. With the IRAS portal open from May 2026 and the first deadline approaching on 30 June 2026, in-scope groups with a Singapore presence should register promptly, model their Pillar Two exposures, and engage qualified tax advisers to navigate the GIR filing requirements. Failing to register on time is a compliance breach with potential penalties.
For MNE groups with Singapore operations, now is the moment to ensure your corporate governance, tax structures, and compliance processes are aligned with this landmark change. Raffles Corporate Services works with corporate groups to manage statutory and compliance obligations in Singapore — speak with our team to understand how the MMT Act affects your Singapore entities.
— The Editorial Team, Raffles Corporate Services