IRAS has issued the third edition of its e-Tax guide on the Multinational Enterprise Top-up Tax and Domestic Top-up Tax, covering scope, safe harbours, filing deadlines and corporate income tax treatment.
The Inland Revenue Authority of Singapore (IRAS) has published the third edition of its e-Tax guide on the Multinational Enterprise Top-up Tax (MTT) and Domestic Top-up Tax (DTT). The guide explains how the Multinational Enterprise (Minimum Tax) Act 2024 and the Multinational Enterprise (Minimum Tax) Regulations 2024 apply the OECD/G20 BEPS 2.0 Pillar Two Global Anti-Base Erosion (GloBE) rules.
The regime covers financial years (FYs) beginning on or after 1 January 2025 and sets a 15% minimum Effective Tax Rate (ETR).
Two top-up taxes
The MTT implements the Income Inclusion Rule (IIR). It taxes Singapore parent entities on the low-taxed profits of foreign subsidiaries and stateless entities, in proportion to their ownership interest.
The DTT implements a Qualified Domestic Minimum Top-up Tax (QDMTT). It charges the low-taxed profits of Singapore-located entities of in-scope MNE groups in full, regardless of foreign parent ownership. The regime holds transitional qualified status from 1 January 2025. Singapore has not implemented the Undertaxed Profits Rule (UTPR).
Scope and exclusions
The rules apply to MNE groups with consolidated revenue of EUR 750 million or more in the Ultimate Parent Entity’s (UPE) Consolidated Financial Statements in at least two of the four preceding FYs. The threshold is adjusted pro-rata for periods longer or shorter than 12 months.
Governmental entities, international organisations, non-profit organisations and certain pension and investment funds are excluded from top-up taxes and filings. Their revenue still counts towards the threshold.
Carve-outs include the International Shipping Income Exclusion and the Substance-Based Income Exclusion (SBIE), which removes a formulaic return on eligible payroll costs and tangible assets from the tax base. A De Minimis Exclusion may be elected where average GloBE revenue is under EUR 10 million and average GloBE income is under EUR 1 million, or there is a net loss.
Side-by-Side package and safe harbours
Singapore offers the Transitional CbCR Safe Harbour, the Simplified Calculations Safe Harbour and the QDMTT Safe Harbour for MTT purposes. It also adopts the OECD Inclusive Framework Side-by-Side package agreed on 5 January 2026. The package includes the Simplified ETR Safe Harbour, the Substance-based Tax Incentive Safe Harbour, the Side-by-Side Safe Harbour and an extended Transitional CbCR Safe Harbour.
Calculation
The Top-up Tax percentage is 15% minus the Jurisdictional ETR. It applies to Excess Profits, being Net GloBE Income less SBIE, plus any Additional Current Top-up Amount. For MTT purposes, QDMTT is deducted. The DTT uses Local Financial Accounting Standards (LFAS) where conditions are met, and the top-up amount for investment entities is nil.
Filing and compliance
Taxpayers self-assess. The UPE must register the group and designate the Designated Local DTT Filing Entity and the Designated Local GIR Filing Entity within six months of its first FY end.
MTT and DTT returns and the GloBE Information Return (GIR) are due within 15 months of FY end. The deadline is 18 months for the transition year, and no earlier than 30 June 2026. Payment is due one month after the filing date, and objections must be filed within two months of notice of assessment.
Singapore signed the GIR Multilateral Competent Authority Agreement (MCAA) on 14 April 2026. Where a GIR is filed centrally elsewhere with an activated exchange relationship, the Singapore entity files a GIR Notification instead.
Records are generally kept for five years, or 10 years for provisions requiring historical tracking. IRAS will take a “light-touch” approach to administrative penalties for FY 2025 to FY 2027 where groups make reasonable compliance efforts. Singapore group entities and joint ventures are jointly and severally liable for unpaid DTT and interest.
Corporate income tax treatment
The MTT, DTT, foreign qualified IIR and UTPR, and foreign QDMTTs are non-deductible for Singapore Corporate Income Tax purposes.
Foreign DMTT and QDMTT may qualify for Foreign Tax Credit (FTC) against Singapore tax on foreign branch profits or dividend income, subject to conditions. Foreign GloBE taxes under the IIR and UTPR do not qualify. Recharges of top-up taxes between group entities are tax-neutral.
