The IRAS has released the second edition of its e-Tax Guide on Multinational Enterprise Top-up Tax (MTT) and Domestic Top-up Tax (DTT), effective for FYs starting 1 January 2025. The guide explains how the rules, aligned with OECD GloBE Pillar 2, apply to MNE groups with EUR 750 million or more in annual consolidated revenue.
The Inland Revenue Authority of Singapore (IRAS) released the second edition of its e-Tax Guide on Multinational Enterprise Top-up Tax and Domestic Top-up Tax on 7 January 2026.
The guide explains the new Pillar 2 Income Inclusion Rule—referred to as the Multinational Enterprise Top-up Tax (MTT)—and the Domestic Top-up Tax (DTT) introduced under the Multinational Enterprise (Minimum Tax) Act 2024.
This e-Tax Guide sets out the key parameters of the MTT and DTT, which are provided in the MMT Act and subsidiary legislation. This e-Tax Guide applies to MNE groups with annual revenue of EUR 750 million or more in the CFS of the UPE for at least two of the four preceding FYs, in line with the Pillar 2 GloBE rules.
In October 2021, the IF agreed on a two-pillar solution (commonly known as BEPS 2.0) to address the tax challenges arising from the digitalisation of the economy. As part of Pillar 2 under BEPS 2.0, the GloBE Model Rules and their Commentary were first released on 20 December 2021 and 14 March 2022, respectively.
The GloBE rules comprise the IIR and UTPR. Broadly, the GloBE rules are designed to ensure that in-scope MNE groups pay a minimum level of tax on income arising in each jurisdiction in which they operate. A top-up tax on excess profits arising in a jurisdiction is imposed whenever the ETR of the MNE group, determined on a jurisdictional basis, is below the minimum rate of 15%.
The GloBE rules recognise that jurisdictions may introduce DMTTs to bring the ETR of LTCEs operating in those jurisdictions to 15%. Where such taxes are regarded as QDMTTs under the GloBE rules, they reduce the top-up tax that would otherwise arise under the IIR or UTPR in respect of such LTCEs.
Singapore has implemented the MTT and DTT for businesses’ FYs starting on or after 1 January 2025. The MTT and DTT are based on the GloBE rules. A summary table of provisions in the MMT Act, and (if applicable) the corresponding provisions in the GloBE rules, is at Annex B.
Singapore’s MMT Act obtained transitional qualified status with effect from 1 January 2025. In other words, the MTT and DTT are recognised as qualified IIR and qualified DMTT, respectively. Please refer to the OECD’s website 6 for the Central Record of Legislation with Transitional Qualified Status.
MNE group to which the MTT / DTT applies
The MTT and DTT apply to an MNE group that has annual revenue of EUR 750 million or more in the CFS of the UPE for at least two out of the four FYs immediately preceding the tested FY (the “revenue threshold”).
Effective date of implementation
The MTT and DTT apply to an MNE group for an FY beginning on or after 1 January 2025. For this purpose, the FY is generally determined based on the accounting period of the UPE’s CFS7.
This means that if the CFS of the UPE of an MNE group are prepared for an accounting period from 1 January 2025 to 31 December 2025, the MTT and DTT apply to in-scope entities of that MNE group whose financial results are consolidated into that CFS for the same period, i.e. from 1 January 2025 to 31 December 2025. This applies even if the FYs of some of the in-scope entities do not begin from 1 January 2025 (e.g. the entities’ FY could be from 1 July 2024 to 30 June 2025 for their individual financial accounts, but they are nonetheless considered as in-scope entities from 1 January 2025).
