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Commentary: Push for global corporate tax deal can make Singapore a more compelling investment hub
In a momentous milestone for สล็อตออนไลน์ the global economy, over 130 jurisdictions, including Singapore, agreed to the key elements of a two-pillar solution to address today’s international corporate tax challenges in July.
It was a breakthrough the Organisation for Economic Cooperation and Development (OECD) estimates can generate up to US$240 billion annually in foregone government revenues arising from tax avoidance when fully implemented.
Years in the making, such efforts under the OECD/G20 Base Erosion and Profit-Sharing Project (BEPS 2.0) to tackle the tax challenges of the digitalisation of the economy are coming to fruition.
But it’s too early to work out the exact impact on Singapore, Finance Minister Lawrence Wong said in early July.
About 1,800 multinational enterprises (MNE)s in Singapore meet the global turnover criteria of €750 million (US$887 million) for the proposed global minimum tax rules under Pillar Two, with a majority with group effective tax rates below 15 per cent.
With Pillar One, Singapore profits derived from foreign MNEs with global turnover exceeding €20 billion (US$24 billion) and profit margin above 10 per cent may be reallocated to larger jurisdictions where their customers reside, resulting in revenue loss for the country.
With Pillar Two, the efficacy of Singapore’s tax incentives in attracting investments may be limited by the global minimum 15 per cent corporate tax proposal.
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