Will Pillar 2 pillars of BEPS affect Singapore's revenue collections?

In response to the GloBE rules under Pillar 2, Singapore is exploring a Minimum Effective Tax Rate (METR) top-up tax on affected MNE groups, which will raise the group’s effective tax rate in Singapore to 15%. It is difficult to assess the potential impact of both pillars of BEPS 2.0 (including METR) on our revenue collections:

What is a pillar 2 globe tax?

Building on the Organisation for Economic Cooperation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) initiative, the Pillar 2 GLoBE proposals are more complex and far-reaching than the seemingly straightforward notion of a minimum tax would suggest.

What is pillar 1?

Pillar 1 seeks to re-allocate some profits and in turn, taxes, from where the economic activities are conducted to where the markets (i.e. the customers) are. This is the case even if profits are currently allocated in line with transfer pricing rules.

What does Pillar 2 mean for multinational enterprises?

Pillar Two would ensure that large multinational enterprises (MNEs) - those with consolidated annual revenues of EUR 750 million or more - pay tax at an effective rate of at least 15% on profits earned in countries in which they operate. This will be primarily administered through a top-up tax regime.