BT Explains: How might Singapore stay competitive with tax changes under BEPS 2.0?

SINGAPORE is implementing a minimum effective tax rate of 15 per cent for multinational enterprise (MNE) groups from January 2025, in line with global tax changes. But this means the Republic will no longer be able to offer traditional tax incentives to attract such companies.

Does Singapore thus have to rethink how it attracts foreign investment, and introduce new non-tax incentives?

Why is Singapore introducing a minimum effective tax rate?

Announced in Budget 2023, this move is to implement Pillar Two of the inclusive framework on Base Erosion and Profit Shifting (BEPS 2.0), a global tax pact that over 140 countries and jurisdictions have inked.