Purpose of this Part
11.—(1) The purpose of this Part is to implement the GloBE rules relating to the top‑up tax under the income inclusion rule (IIR).
(2) For that purpose, this Part makes provision for a tax payable in respect of a constituent entity located in a jurisdiction outside Singapore, or a stateless entity, of an MNE group to which this Act applies where, for a financial year —(a)
the effective tax rate for the constituent entities of the MNE group for that jurisdiction or for that stateless entity (as determined in accordance with this Part) is less than the minimum rate; and
(b)
any responsible member of the MNE group that holds an ownership interest in that entity is located in Singapore.
(3) The tax is to be known as the “multinational enterprise top‑up tax” or “MTT”.
Entity chargeable with MTT
12. An entity (called in this Act a chargeable entity) is chargeable with MTT for a financial year if —(a)
the entity is a responsible member of an MNE group at any time in the financial year;
(b)
this Act applies to the MNE group for the financial year;
(c)
the entity holds an ownership interest in another constituent entity of the MNE group at any time in the financial year;
(d)
that other constituent entity is located in a jurisdiction outside Singapore or is a stateless entity, and has a top‑up amount for the financial year (called in this Act a relevant entity); and
(e)
the entity is located in Singapore.
Responsible members of MNE group
13.—(1) The ultimate parent entity of an MNE group is a responsible member of the MNE group if it is not an excluded entity and is —(a)
located in Singapore; or
(b)
subject to a qualified IIR under the law of the jurisdiction where it is located.
(2) An intermediate parent entity (X) of an MNE group is a responsible member of the MNE group if —(a)
the ultimate parent entity of the MNE group is not a responsible member of the MNE group;
(b)
no constituent entity of the MNE group that holds a controlling interest in X is —(i)
located in Singapore; or
(ii)
subject to a qualified IIR under the law of the jurisdiction where it is located; and
(c)
X is —(i)
located in Singapore; or
(ii)
subject to a qualified IIR under the law of the jurisdiction where it is located.
(3) A partially‑owned parent entity (X) of an MNE group is a responsible member of the MNE group if —(a)
the ownership interests in X are not wholly held (directly or indirectly) by another partially‑owned parent entity of the MNE group that is —(i)
located in Singapore; or
(ii)
subject to a qualified IIR under the law of the jurisdiction where it is located; and
(b)
X is —(i)
located in Singapore; or
(ii)
subject to a qualified IIR under the law of the jurisdiction where it is located.
Amount of MTT chargeable on chargeable entity
14.—(1) Subject to subsection (2), the amount of MTT chargeable on a chargeable entity for a financial year is the sum of the top‑up tax (determined in accordance with sections 15, 24 and 25) of each relevant entity of the chargeable entity for the financial year.
(2) Where a chargeable entity (X) holds an indirect ownership interest in a relevant entity (Y) through another responsible member (Z) of the MNE group, the amount of MTT chargeable on X for the financial year is reduced (but not below nil) by the amount of MTT or qualified IIR chargeable for that financial year on Z in respect of the part of the top‑up amount of Y that is attributable to X’s indirect ownership interest in Y for that financial year.
Top‑up tax for relevant entity other than investment entity or insurance investment entity
15.—(1) In this Part, the top‑up tax for a relevant entity (other than an investment entity or an insurance investment entity) of a chargeable entity for a financial year is the top‑up amount of the relevant entity for the financial year multiplied by the chargeable entity’s inclusion ratio for the entity for the financial year.
(2) In this section, a chargeable entity’s inclusion ratio for a relevant entity for a financial year is determined by the formula where —(a)
A is the GloBE income or loss of the relevant entity for the financial year; and
(b)
B is the GloBE income or loss of the relevant entity for the financial year that is attributable to entities other than the chargeable entity as determined under subsection (3).
(3) In subsection (2), the GloBE income or loss of a relevant entity for a financial year that is attributable to entities other than the chargeable entity is the GloBE income or loss of the relevant entity that would have been treated in the chargeable entity’s consolidated financial statements as attributable to those other entities, if the chargeable entity had prepared consolidated financial statements on the bases specified in subsection (4) (whether or not the chargeable entity had actually prepared such consolidated financial statements).
(4) The bases mentioned in subsection (3) are as follows:(a)
the ultimate parent entity of the MNE group prepares its consolidated financial statements in accordance with an acceptable financial accounting standard, or an authorised financial accounting standard but only if adjustment is made to prevent any material competitive distortion from the application of such authorised standard;
(b)
the consolidated financial statements of the chargeable entity are prepared in accordance with the same accounting standards as the consolidated financial statements mentioned in paragraph (a);
(c)
the chargeable entity owns a controlling interest in the relevant entity such that the income and expenses of the relevant entity are consolidated on a line‑by‑line basis with those of the chargeable entity;
(d)
the relevant entity’s net income is the amount of its GloBE income or loss;
(e)
all of the relevant entity’s GloBE income or loss is attributable to transactions with persons that are not members of the MNE group;
(f)
any ownership interest in the relevant entity that is not held by the chargeable entity is held by persons that are not members of the MNE group.
(5) For the purpose of subsection (2), where the relevant entity is a flow‑through entity, the GloBE income or loss of the relevant entity excludes any amount that is allocated to an owner of the relevant entity who is not a member of the MNE group.
(6) Where a relevant entity has a top‑up amount for a financial year, but its GloBE income or loss for the financial year is nil or a negative amount, then, for the purpose of subsection (2), its GloBE income or loss for the financial year is deemed to be its top‑up amount for the financial year divided by 15%.
Top‑up amounts of constituent entities other than special entities
16.—(1) In this Part, a constituent entity (not being a special entity) of an MNE group has a top‑up amount for a financial year if the amount determined under subsection (2) or (3) is a positive amount, and that positive amount is considered the top‑up amount of the constituent entity for the financial year.
(2) If the sum of the GloBE income or loss for a financial year of all the constituent entities (not being special entities) of an MNE group located in a single jurisdiction is a positive amount, the top‑up amount for that financial year of each of those constituent entities is determined by the formula where —(a)
A is the jurisdictional top‑up amount (as determined in accordance with subsection (4)) for all of those constituent entities for that financial year;
(b)
B is the GloBE income or loss of the constituent entity for the financial year if the constituent entity has a positive amount of GloBE income or loss for that financial year, otherwise B is nil; and
(c)
C is the sum of the GloBE income or loss for the financial year of each of those constituent entities that has a positive amount of GloBE income or loss for that financial year.
(3) If the sum of the GloBE income or loss for a financial year of all the constituent entities (not being special entities) of an MNE group located in a single jurisdiction is nil or a negative amount, the top‑up amount for that financial year of each of those constituent entities is determined by any of the following formulae (whichever is applicable):(a)
if those constituent entities have an additional current top‑up amount under section 21(1) but not under section 21(4), for that financial year: where —(i)
A has the meaning given by subsection (2)(a);
(ii)
D is nil if the GloBE income or loss of the constituent entity for that financial year is a positive amount or the adjusted covered taxes for that constituent entity for that financial year is nil or a positive amount, otherwise D is the amount determined by multiplying the GloBE income or loss (being nil or a negative amount) of that constituent entity for that financial year by 15% and then deducting the adjusted covered taxes (being a negative amount) for that constituent entity for that financial year, except that if the resulting amount is negative, D is nil; and
(iii)
E is the sum of D for each of those constituent entities;
(b)
if those constituent entities have an additional current top‑up amount under section 21(4) but not under section 21(1), for that financial year, and the recalculation in section 21(4) is only made for one previous financial year: where —(i)
A has the meaning given by subsection (2)(a);
(ii)
F is the GloBE income or loss of the constituent entity for the previous financial year, except that if the GloBE income or loss for the previous financial year is a negative amount, F is nil; and
(iii)
G is the sum of F for each of those constituent entities;
(c)
in any other case, in accordance with the applicable formula prescribed in the regulations.
(4) In subsection (2), the jurisdictional top‑up amount for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year is determined by the formula (H × I) + J – K, where —(a)
H is the top‑up tax percentage for those constituent entities for that financial year as determined in accordance with subsection (5);
(b)
I is the excess profits of those constituent entities for that financial year as determined in accordance with subsection (6);
(c)
J is the additional current top‑up amount as determined in accordance with section 21 for those constituent entities for that financial year; and
(d)
K is the qualified domestic minimum top‑up tax imposed by the law of that jurisdiction in respect of those constituent entities for that financial year, but —(i)
excluding any amount —(A)
contested in any judicial or administrative proceedings in that jurisdiction; or
(B)
determined by the tax authority of that jurisdiction to be not assessable or collectible,
on constitutional or similar grounds in that jurisdiction or any specific agreement with the government of that jurisdiction limiting the tax liability of those constituent entities; and
(ii)
including any amount excluded by a previous application of sub‑paragraph (i) but determined to be payable for that financial year.
(5) In subsection (4), the top‑up tax percentage for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year is determined by the formula L – M, where —(a)
L is the minimum rate; and
(b)
M is the effective tax rate for those constituent entities for that financial year as determined in accordance with section 17,
and if the percentage so determined is nil or less, the top‑up tax percentage for those constituent entities for that financial year is nil.
(6) In subsection (4), the excess profits of the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year is determined by the formula N − O, where —(a)
N is the sum of the GloBE income or loss for that financial year of those constituent entities; and
(b)
O is the substance‑based income exclusion for those constituent entities for that financial year as determined in accordance with section 18,
and if the amount so determined is nil or less, the excess profits of those constituent entities for that financial year is nil.
(7) The Minister may make regulations under section 84 to provide for —(a)
the recalculation, in a subsequent financial year, of the top‑up amounts of the constituent entities of an MNE group for a financial year in accordance with the GloBE rules; and
(b)
the determination of the top‑up amount of a constituent entity of an MNE group for a financial year in specified circumstances in accordance with the GloBE rules.
Effective tax rate for constituent entities other than special entities
17.—(1) In this Part, the effective tax rate for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year is determined by the formula where —(a)
A is the sum of the adjusted covered taxes (including any negative amount of adjusted covered taxes) for that financial year of those constituent entities; and
(b)
B is the sum of the GloBE income or loss for that financial year of those constituent entities.
(2) In subsection (1), if B is nil or a negative amount, the effective tax rate for those constituent entities for that financial year is 15%.
(3) In subsection (1), if A is a negative amount and B is a positive amount — (a)
the effective tax rate for those constituent entities for that financial year is nil; and
(b)
A is treated as negative tax carried forward for those constituent entities.
(4) Where, because of subsection (3) or section 21(2), an MNE group has an amount of negative tax carried forward for its constituent entities (not being special entities) located in a jurisdiction that has not been deducted under this subsection —(a)
to the extent possible, the amount of negative tax is deducted against A in subsection (1) for the next financial year in which the MNE group has a positive amount of both A and B for that jurisdiction;
(b)
A for the MNE group for that jurisdiction for that financial year is reduced accordingly (but not below nil); and
(c)
any amount remaining undeducted is to be carried forward to the financial year following that financial year, and paragraphs (a) and (b) apply with the necessary modifications in relation to that amount.
(5) The Minister may make regulations under section 84 to provide for the recalculation, in a subsequent financial year, of the effective tax rate for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year in accordance with the GloBE rules.
Substance‑based income exclusion for constituent entities other than special entities
18.—(1) For the purpose of section 16(6), the substance‑based income exclusion for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year is determined by the formula A + B, where —(a)
A is the sum of the payroll carve‑out amount for each of those constituent entities for that financial year; and
(b)
B is the sum of the tangible asset carve‑out amount for each of those entities for that financial year.
(2) In subsection (1), the payroll carve‑out amount of a constituent entity for a financial year is the applicable percentage in the Second Schedule of the eligible payroll costs of that constituent entity for that financial year.
(3) In subsection (1), the tangible asset carve‑out amount of a constituent entity for a financial year is the applicable percentage in the Second Schedule of the carrying value of the eligible tangible assets of that constituent entity for that financial year.
(4) In this section —“carrying value”, in relation to an eligible tangible asset of a constituent entity of an MNE group for a financial year, means the average of —(a)
the value of the asset recorded at the start of the financial year; and
(b)
the value of the asset recorded at the end of the financial year,
for the purpose of preparing the consolidated financial statements of the ultimate parent entity of the MNE group, where each such value —
(c)
takes into account the effects of accumulated depreciation, amortisation or depletion, impairment losses (or any reversal of any impairment loss that does not cause the value of the asset to be greater than what it would have been had the impairment loss not been recognised), and any capitalised amount of payroll costs, purchase accounting adjustments and elimination adjustments attributable to inter‑company sales; but
(d)
does not include any increase in the value of the asset or any increase in the accumulated depreciation of the asset recorded for the purposes of preparing the consolidated financial statements of the ultimate parent entity of the MNE group from time to time arising from any revaluation of the asset;
“eligible employee”, in relation to a constituent entity of an MNE group, means —(a)
an employee of that constituent entity (including a part‑time employee); or
(b)
an independent contractor participating in the ordinary operating activities of the constituent entity, or the MNE group under the direction and control of the MNE group,
who performs activities for the MNE group in the jurisdiction in which the constituent entity is located;
“eligible payroll costs”, in relation to a constituent entity for a financial year, means —(a)
expenditure on employee compensation (including salaries, wages, stock‑based compensation, employee insurance, contributions to pension or provident funds, and other expenditure that provide a direct and separate personal benefit) for its eligible employees;
(b)
expenditure on payroll and employment taxes for those employees; and
(c)
social security contributions by the employer and similar payments for those employees,
recorded in the financial statements used to determine the constituent entity’s FANIL for that financial year, but does not include —
(d)
costs taken into account in the tangible asset carve‑out amount of the constituent entity; and
(e)
any prescribed amount of the costs of the constituent entity attributable to any income from international shipping activities or ancillary international shipping activities (as defined in the regulations) in the manner prescribed in the regulations;
“eligible tangible asset”, in relation to a constituent entity, means —(a)
any property, plant or equipment located in the jurisdiction in which the constituent entity is located;
(b)
natural resources located in that jurisdiction;
(c)
a right to use a tangible asset located in that jurisdiction under a lease; or
(d)
a licence granted by or similar arrangement made with the government of that jurisdiction for the use of immovable property or exploitation of natural resources in that jurisdiction where significant investment in tangible assets is expected under the licence or arrangement,
but does not include —
(e)
any property (including land or buildings) held for sale, lease or investment, other than such property as may be prescribed in the regulations; and
(f)
such asset used to generate any income from international shipping activities or ancillary international shipping activities (as defined in the regulations) as may be prescribed in the regulations.
(5) For the purpose of this section, the eligible payroll costs for a financial year, and the eligible tangible assets, of a constituent entity that is a main entity exclude (respectively) the eligible payroll costs for that financial year, and the eligible tangible assets, of its permanent establishment.
(6) In subsection (5), the eligible payroll costs for a financial year, and the eligible tangible assets, of a permanent establishment are the respective eligible payroll costs for that financial year and the eligible tangible assets taken into account in any separate financial accounts for the permanent establishment, after making the adjustments required under the regulations.
(7) For the purposes of subsections (2) and (3), where a proportion of the FANIL for a financial year of a flow‑through entity (X) (not being the ultimate parent entity of the MNE group) is allocated to a constituent entity (Y) of an MNE group under paragraph 6(9)(b) or (c)(i) of the First Schedule —(a)
the same proportion of the eligible payroll costs or carrying value of the eligible tangible assets of X for that financial year is also allocated to Y, if the eligible employees or eligible tangible assets of X (as the case may be) are located in the same jurisdiction as Y; and
(b)
any remaining eligible payroll costs or carrying value of the eligible tangible assets of X is disregarded in computing X’s payroll carve‑out amount or tangible asset carve‑out amount (as the case may be) for that financial year.
(8) For the purposes of subsections (2) and (3), where a proportion of the FANIL for a financial year of a flow‑through entity (X) (being the ultimate parent entity of the MNE group) is allocated to X under paragraph 6(12)(f) of the First Schedule, and the eligible employees or eligible tangible assets of X are located in the same jurisdiction as X, then only that proportion of its eligible payroll costs or carrying value of its eligible tangible assets (as the case may be) for that financial year is treated as its eligible payroll costs or carrying value of its eligible tangible assets (as the case may be) for that financial year.
(9) Where the filing entity of an MNE group so elects in a GloBE information return (whether filed in Singapore or another jurisdiction) for a financial year, the substance‑based income exclusion for the constituent entities (not being special entities) of the MNE group located in a jurisdiction for that financial year is treated as nil.
(10) An MNE group may determine the substance‑based income exclusion for the constituent entities (not being special entities) of the MNE group located in a jurisdiction for a financial year by taking into account only the amount of —(a)
some (and not all) of the eligible payroll costs of those constituent entities for that financial year; and
(b)
some (and not all) of the carrying value of the eligible tangible assets of those constituent entities for that financial year.
(11) The Minister may make regulations under section 84 to provide for further adjustments to the substance‑based income exclusion (or any matter used for its computation) for any description of constituent entities of an MNE group located in a jurisdiction for a financial year in accordance with the GloBE rules.
De minimis exclusion
19.—(1) This section applies in relation to the constituent entities (not being stateless entities, investment entities and insurance investment entities) of an MNE group located in a jurisdiction for a financial year (FY) if —(a)
the average of the following sums is less than EUR 10 million, or its equivalent in other currency as determined under the regulations:(i)
the sum of the adjusted revenues of those constituent entities for FY;
(ii)
the sum of the adjusted revenues of the constituent entities of the MNE group in the preceding financial year (FY‑1), for FY‑1;
(iii)
the sum of the adjusted revenues of the constituent entities of the MNE group in the financial year preceding FY‑1 (FY‑2), for FY‑2; and
(b)
the average of the following sums is less than EUR 1 million, or its equivalent in other currency as determined under the regulations:(i)
the sum of the GloBE income or loss of the constituent entities in paragraph (a)(i) for FY;
(ii)
the sum of the GloBE income or loss of the constituent entities of the MNE group in FY‑1, for FY‑1;
(iii)
the sum of the GloBE income or loss of the constituent entities of the MNE group in FY‑2, for FY‑2.
(2) In subsection (1), if —(a)
none of the constituent entities mentioned in subsection (1)(a)(ii) and (b)(ii); or
(b)
none of the constituent entities mentioned in subsection (1)(a)(iii) and (b)(iii),
had any adjusted revenue or GloBE income or loss for FY‑1 or FY‑2 (as the case may be), that financial year is disregarded in computing the average of the sums in subsection (1)(a) and (b).
(3) For the purposes of subsection (1), if any financial year in that subsection is longer or shorter than a year, then —(a)
the sum of the adjusted revenues; or
(b)
the sum of the GloBE income or loss,
of the constituent entities for that financial year is the amount arrived at by multiplying that sum by the amount given by dividing 365 by the number of days in that financial year.
(4) If subsection (1) applies, and the filing entity of the MNE group so elects in a GloBE information return (whether filed in Singapore or another jurisdiction), the top‑up amounts for that financial year of those constituent entities are deemed to be nil.
(5) An election under subsection (4) must be made in accordance with the GloBE rules.
(6) In this section, “adjusted revenue”, in relation to a constituent entity for a financial year, means the revenue of the constituent entity that is taken into account in its FANIL for the financial year after making the adjustments prescribed by the regulations.
GloBE Safe Harbours
20.—(1) This section applies if —(a)
specified entities of an MNE group located in a jurisdiction are, in accordance with the regulations for applying a GloBE Safe Harbour, eligible for the GloBE Safe Harbour for a financial year; and
(b)
the filing entity of the MNE group elects in a GloBE information return (whether filed in Singapore or another jurisdiction) to apply that GloBE Safe Harbour for that jurisdiction for those entities for that financial year.
(2) If subsection (1) applies, then, despite anything in this Part, the top‑up amounts (or such parts thereof specified under the regulations) for that financial year of those entities are treated as nil.
(3) An election under subsection (1)(b) must be made in accordance with the GloBE rules and the regulations.[Act 25 of 2025 wef 01/01/2025]
(4) An election is not effective for the purpose of subsection (1)(b) if made under such circumstances as the regulations made for the purposes of this section may prescribe.[Act 25 of 2025 wef 01/01/2025]
Additional current top‑up amount for constituent entities other than special entities
21.—(1) Where, for any financial year —(a)
the sum of the GloBE income or loss (including any negative amount of GloBE income or loss) of all the constituent entities (not being special entities) of an MNE group located in a jurisdiction (called in this section A) is nil or a negative amount;
(b)
the sum of the adjusted covered taxes (including any negative amount of adjusted covered taxes) of those constituent entities (called in this section B) is a negative amount; and
(c)
B (being a negative amount) is less than 15% of A (being nil or a negative amount),
then, for the purposes of this Act, an additional current top‑up amount applies to those entities for that jurisdiction for the financial year that is equal to the difference between 15% of A and B (expressed as a positive amount).
(2) Where the filing entity of an MNE group so elects in a GloBE information return (whether filed in Singapore or another jurisdiction) —(a)
any additional current top‑up amount (as computed under subsection (1)) that applies to the constituent entities (not being special entities) of an MNE group for a jurisdiction for a financial year, that is not attributable (in accordance with the regulations) to the carry back of losses, is treated as negative tax carried forward for those entities; and
(b)
for the purpose of section 16, the amount that is so attributable to the carry back of losses is treated as an additional current top‑up amount under subsection (1) that applies to those entities for that financial year.
(3) Section 17(4) applies to the amount of negative tax carried forward under subsection (2)(a).
(4) Where, in accordance with the regulations, there is any recalculation made for a financial year (called in this section the current financial year) of —(a)
the top‑up amounts of the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a previous financial year; or
(b)
the effective tax rate for such entities for a previous financial year,
and after making all required recalculations —
(c)
the total top‑up amounts of those entities for the previous financial year (called in this section C) is greater than the corresponding amount previously calculated for that financial year (called in this section D),
then, an additional current top‑up amount applies to those entities for the current financial year that is equal to the difference between C and D (expressed as a positive amount).
(5) If —(a)
an election mentioned in section 19(4) has been made in respect of the constituent entities (other than stateless entities, investment entities and insurance investment entities) of an MNE group for a previous financial year;
(b)
any additional current top‑up amount applies to those entities under subsection (4) for the current financial year; and
(c)
after making all required recalculations in accordance with the regulations, section 19(1)(a) and (b) is not satisfied for the previous financial year,
then, for the purpose of calculating the additional current top‑up amount for the current financial year, D in subsection (4) is treated as nil.
Top‑up amounts of stateless entities
22.—(1) In this Part, the top‑up amount of a constituent entity that is a stateless entity is determined by applying sections 16, 17, 18 and 21 (and regulations made for the purposes of those sections) to the constituent entity as if it were the only constituent entity of the MNE group located in a jurisdiction, and for this purpose references to a constituent entity (not being a special entity) in those sections are references to the stateless entity.
(1A) In determining the jurisdictional top-up amount in section 16(4) as applied by subsection (1), there is to be further deducted from the amount determined in accordance with section 16(4) as modified by that subsection, any amount of DTT imposed on the stateless entity if it is also a section 29(b) entity.[Act 25 of 2025 wef 01/01/2025]
(2) For the purpose of applying section 18 under subsection (1), where a stateless entity has any payroll carve‑out amount or tangible asset carve‑out amount (as defined in section 18) for a financial year that is not allocated to another entity, the substance‑based income exclusion for the stateless entity is treated as nil.
Top‑up amounts of minority‑owned constituent entities and members of minority‑owned subgroup
23.—(1) In this Part, the top‑up amount of a constituent entity that is a minority‑owned constituent entity (not being an investment entity or an insurance investment entity), and that is not a member of a minority‑owned subgroup, is determined by applying sections 16, 17, 18, 20 and 21 (and regulations made for the purposes of those sections) to the constituent entity as if it were the only constituent entity of the MNE group located in the jurisdiction, and for this purpose references to a constituent entity (not being a special entity) in those sections are references to the constituent entity.
(2) In this Part, the top‑up amount of a constituent entity that is a member of a minority‑owned subgroup is determined by applying sections 16, 17, 18, 20 and 21 (and regulations made for the purposes of those sections) to that entity as if references to a constituent entity (not being a special entity) in those sections were references to a member of the minority‑owned subgroup, and references to an MNE group in those sections were references to the minority‑owned subgroup.
Top‑up tax for investment entities and insurance investment entities
24.—(1) In this Part, the top‑up tax for a financial year for a relevant entity of a chargeable entity that is an investment entity or insurance investment entity, is the top‑up amount of the entity for the financial year.
(2) In this Part, an investment entity or insurance investment entity has a top‑up amount for a financial year if the amount determined under subsection (3) or (4) is a positive amount.
(3) If the sum of the allocable GloBE income or loss for a financial year of all constituent entities of an MNE group that are investment entities or insurance investment entities located in a single jurisdiction is a positive amount, the top‑up amount for that financial year of each of those entities is determined by the formula where —(a)
A is the jurisdictional top‑up amount (as determined in accordance with subsection (5)) for all those entities for that financial year;
(b)
B is the allocable GloBE income or loss of the entity for that financial year if the entity has a positive amount of allocable GloBE income or loss for that financial year, otherwise B is nil; and
(c)
C is the sum of the allocable GloBE income or loss for that financial year of each of those entities that has a positive amount of allocable GloBE income or loss for that financial year.
(4) If the sum of the allocable GloBE income or loss for a financial year of all constituent entities of an MNE group that are investment entities or insurance investment entities located in a jurisdiction is nil or a negative amount, the top‑up amount for that financial year of each of those entities is determined by any of the following formulae (whichever is applicable):(a)
if the jurisdiction has an additional current top‑up amount under section 21(1) (as applied by subsection (13)) but not under section 21(4) (as applied by subsection (13)): where —(i)
A has the meaning given by subsection (3)(a);
(ii)
D is nil if the allocable GloBE income or loss of the entity for that financial year is a positive amount or the adjusted covered taxes for that entity for that financial year is nil or a positive amount, otherwise D is the amount determined by multiplying the allocable GloBE income or loss (being nil or a negative amount) of that entity for that financial year by 15% and then deducting the adjusted covered taxes (being a negative amount) for that entity for that financial year, except that if the resulting amount is negative, D is nil; and
(iii)
E is the sum of D for each of those entities;
(b)
if the jurisdiction has an additional current top‑up amount under section 21(4) (as applied by subsection (13)) but not under section 21(1) (as applied by subsection (13)) and the recalculation in section 21(4) is only made for one previous financial year: where —(i)
A has the meaning given by subsection (3)(a);
(ii)
F is the allocable GloBE income or loss of that entity for the previous financial year, except that if the allocable GloBE income or loss for the previous financial year is a negative amount, F is nil; and
(iii)
G is the sum of F for each of those entities;
(c)
in any other case, in accordance with the applicable formula prescribed in the regulations.
(5) In subsection (3), the jurisdictional top‑up amount for all constituent entities of an MNE group that are investment entities or insurance investment entities located in a jurisdiction for a financial year is determined by the formula (H × I) + J – K, where —(a)
H is the top‑up tax percentage for those entities for that financial year as determined in accordance with subsection (6);
(b)
I is the excess profits of those entities for that financial year as determined in accordance with subsection (11);
(c)
J is the additional current top‑up amount as determined in accordance with section 21 (as applied by subsection (13)) for those entities for that financial year; and
(d)
K is the qualified domestic minimum top‑up tax imposed by the law of that jurisdiction in respect of those entities for that financial year, but —(i)
excluding any amount —(A)
contested in any judicial or administrative proceedings in that jurisdiction; or
(B)
determined by the tax authority of that jurisdiction to be not assessable or collectible,
on constitutional or similar grounds in that jurisdiction or any specific agreement with the government of that jurisdiction limiting the tax liability of those entities; and
(ii)
including any amount excluded by a previous application of sub‑paragraph (i) but determined to be payable for that financial year.
(6) In subsection (5), the top‑up tax percentage for constituent entities of an MNE group that are investment entities or insurance investment entities located in a jurisdiction for a financial year is determined by the formula L − M, where —(a)
L is the minimum rate; and
(b)
M is the effective tax rate for those entities for that financial year as determined in accordance with subsection (7),
and if the percentage so determined is nil or less, the top‑up tax percentage for those constituent entities for that financial year is nil.
(7) Subject to subsections (8), (9) and (10), the effective tax rate for constituent entities of an MNE group that are investment entities or insurance investment entities located in a jurisdiction for a financial year is determined by the formula where —(a)
N is the sum of the allocable adjusted covered taxes (including any negative amount of allocable adjusted covered taxes) for that financial year of those entities; and
(b)
O is the sum of the allocable GloBE income or loss for that financial year of those entities.
(8) In subsection (7), if O is nil or a negative amount, the effective tax rate for those entities for that financial year is 15%.
(9) In subsection (7), if N is a negative amount and O is a positive amount —(a)
the effective tax rate for those entities for that financial year is nil; and
(b)
N is treated as negative tax carried forward for those entities.
(10) Where, because of subsection (9) or (14), an MNE group has an amount of negative tax carried forward for its constituent entities that are investment entities or insurance investment entities located in a jurisdiction that has not been deducted under this subsection —(a)
to the extent possible, the amount of negative tax is deducted against N in subsection (7) for the next financial year in which the MNE group has a positive amount of both N and O for that jurisdiction;
(b)
N for the MNE group for that jurisdiction for that financial year is reduced accordingly (but not below nil); and
(c)
any amount remaining undeducted is to be carried forward to the financial year following that financial year, and paragraphs (a) and (b) apply with the necessary modifications in relation to that amount.
(11) In subsection (5), the excess profits of constituent entities of an MNE group that are investment entities or insurance investment entities located in a jurisdiction for a financial year is determined by the formula P − Q, where —(a)
P is the sum of the allocable GloBE income or loss for that financial year of those entities; and
(b)
Q is the substance‑based income exclusion for that financial year for those entities determined in accordance with subsection (12),
and if the amount so determined is nil or less, the excess profits of those constituent entities for that financial year is nil.
(12) In subsection (11)(b), the substance‑based income exclusion for constituent entities of an MNE group that are investment entities or insurance investment entities located in a jurisdiction for a financial year is determined by applying section 18 to the MNE group for the jurisdiction with the following modifications:(a)
references to a constituent entity (not being a special entity) are references to a constituent entity that is an investment entity or insurance investment entity;
(b)
the eligible payroll cost of a constituent entity for the financial year is adjusted by S in the definition of “allocable GloBE income or loss” in subsection (16);
(c)
the carrying value of the eligible tangible assets of a constituent entity for the financial year is adjusted by S as mentioned in paragraph (b).
(13) Section 21(1) and (4) applies to determine any additional current top‑up amount for constituent entities of an MNE group that are investment entities or insurance investment entities located in a jurisdiction for a financial year with the following modifications:(a)
references to a constituent entity (not being a special entity) are references to a constituent entity that is an investment entity or an insurance investment entity;
(b)
references to the GloBE income or loss of a constituent entity (not being a special entity) are references to the allocable GloBE income or loss of a constituent entity that is an investment entity or an insurance investment entity;
(c)
references to the adjusted covered taxes of a constituent entity (not being a special entity) are references to the allocable adjusted covered taxes of a constituent entity that is an investment entity or insurance investment entity;
(d)
references to the effective tax rate for the constituent entities (not being special entities) are references to the effective tax rate for constituent entities that are investment entities or insurance investment entities.
(14) Where the filing entity of an MNE group so elects in a GloBE information return (whether filed in Singapore or another jurisdiction) —(a)
any additional current top‑up amount computed under section 21(1) (as applied by subsection (13)) that applies to constituent entities of the MNE group that are investment entities or insurance investment entities located in a jurisdiction for a financial year, that is not attributable (in accordance with the regulations) to the carry back of losses, is treated as negative tax carried forward for those entities; and
(b)
the amount that is so attributable to the carry back of losses is treated as an additional current top‑up amount under section 21(1) (as applied by subsection (13)) that applies to those entities for that financial year.
(15) Subsection (10) applies to the amount of negative tax carried forward under subsection (14)(a).
(16) In this section —“allocable adjusted covered taxes”, in relation to an investment entity or insurance investment entity, means the adjusted covered taxes of the entity (determined in accordance with paragraph 1 of the First Schedule) that is attributable to its allocable GloBE income or loss;
“allocable GloBE income or loss”, in relation to an investment entity or insurance investment entity, means the amount determined by the formula R × S, where —(a)
R is the GloBE income or loss of the entity determined in accordance with paragraph 6 of the First Schedule; and
(b)
S is the inclusion ratio determined in accordance with section 15 and any regulations mentioned in subsection (18) as if the ultimate parent entity of the MNE group were the chargeable entity in respect of the entity.
(17) The Minister may make regulations under section 84 to modify the application of this Part in a case where an election is made in a GloBE information return (whether filed in Singapore or another jurisdiction) by a filing entity of an MNE group to —(a)
treat a constituent entity that is an investment entity or insurance investment entity as a flow‑through entity; or
(b)
make adjustments to the GloBE income or loss for a financial year of a constituent entity that is an investment entity or insurance investment entity (T), and one or more other constituent entities (not being investment entities or insurance investment entities) that hold a direct ownership interest in T, based on the distributions made by T in the financial year.
(18) The Minister may also make regulations under section 84 to provide for —(a)
the recalculation, in a subsequent financial year, of the effective tax rate for constituent entities of an MNE group that are investment entities or insurance investment entities located in a jurisdiction for a financial year in accordance with the GloBE rules; and
(b)
the computation of S in the definition of “allocable GloBE income or loss” in subsection (16) in accordance with the GloBE rules.
Application of this Part to joint ventures and JV subsidiaries
25.—(1) For the purposes of this Part, a standalone JV, or an entity of a JV group, that —(a)
is connected to an MNE group; and
(b)
has a top‑up amount (as determined under this section),
is treated as a relevant entity of the MNE group.
(2) Whether a standalone JV or entity of a JV group has a top‑up amount is determined by applying sections 16, 17, 18, 19, 20, 21 and 24 (and regulations made for the purposes of those sections) with the following modifications:(a)
except in paragraphs (b) and (c), references to an MNE group are to the standalone JV or the JV group of which the entity is a part;
(b)
references to the filing entity of an MNE group are to the filing entity of the MNE group to which the standalone JV or entity is connected;
(c)
the reference in section 18(10) to a determination by an MNE group is to a determination by the MNE group to which the standalone JV or entity is connected;
(d)
references to the ultimate parent entity of an MNE group are to the standalone JV or the joint venture of the JV group;
(e)
references to a constituent entity (not being a special entity) or a constituent entity that is an investment entity or insurance investment entity (as the case may be), are to the standalone JV or the entity;
(f)
such other modifications as may be prescribed by the regulations.
(3) The FANIL and the GloBE income or loss for a financial year of a standalone JV or entity of a JV group are determined under paragraph 6 (except sub‑paragraphs (4) and (14)) of the First Schedule and regulations made for the purpose of that paragraph, with the following modifications:(a)
references to an MNE group are to the standalone JV or the JV group of which the entity is a part;
(b)
references to the ultimate parent entity of an MNE group are to the standalone JV or the joint venture of the JV group;
(c)
references to a constituent entity are to the standalone JV or the entity;[Act 25 of 2025 wef 01/01/2025]
(d)
such other modifications as may be prescribed by the regulations.
(4) For the purpose of subsection (3), if the financial year (FY1) of the standalone JV or entity of a JV group is different from the financial year (FY2) of the ultimate parent entity of the MNE group to which it is connected, the FANIL of the standalone JV or entity for FY2 is its FANIL for FY1 that ends at any time in FY2.
(5) For the purpose of applying section 18(3) in subsection (2) in a case described in subsection (4), the carrying value of an eligible tangible asset of the standalone JV or entity of a JV group for FY2 is its carrying value for FY1 that ends at any time in FY2.
(6) The qualifying current tax expenses, qualifying deferred tax expenses and adjusted covered taxes of a standalone JV or entity of a JV group are determined under paragraph 1 of the First Schedule and the regulations made for the purpose of that paragraph, with the following modifications:(a)
references to an MNE group are to the standalone JV or the JV group of which the entity is a part;
(b)
references to the ultimate parent entity of an MNE group are to the standalone JV or the joint venture of the JV group;
(c)
references to a constituent entity are to the standalone JV or the entity;[Act 25 of 2025 wef 01/01/2025]
(d)
such other modifications as may be prescribed by the regulations.
Multi‑parent groups
26. The Minister may make regulations under section 84 in accordance with the GloBE rules to prescribe how the provisions of this Act apply in relation to a multi‑parent group.[Act 25 of 2025 wef 01/01/2025]
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
