Debated in Parliament on 18 Feb 2025.
Mr Mark Lee asked the Prime Minister and Minister for Finance regarding the recent withdrawal of the United States’ support for the OECD's global corporate minimum tax under the Base Erosion and Profit Shifting (BEPS) 2.0 framework (a) what are the implications for Singapore's implementation of the domestic minimum top-up tax starting in 2025; (b) how does this development affect international tax cooperation; and (c) what is the Ministry’s assessment of the risks for Singapore's competitiveness, particularly in attracting multinational enterprises.
Mr Mark Lee asked the Prime Minister and Minister for Finance regarding concerns of fragmentation in global tax standards from the withdrawal of the United States’ support for the OECD's global corporate minimum tax (a) whether Singapore's tax strategies will be adjusted to ensure it remains a pro-business and investment-friendly hub; (b) what measures will be taken to mitigate risks to key sectors or industries reliant on Singapore's tax advantages; and (c) how will Singapore balance its compliance to global frameworks against the risk of losing its competitive edge.
According to the United States’ (US') presidential memorandum on the Organisation for Economic Co-operation and Development Global Tax Deal dated 20 January 2025, the United States Treasury has 60 days to deliver its recommendations on actions against non-compliance with any tax treaty with the US, or tax rules that are extraterritorial or disproportionately affect American companies. At this stage, it is unclear what measures the US will take and how other jurisdictions will respond. We have prepared for different possible scenarios and will continue to monitor the issue as it develops.
Sustaining economic competitiveness and supporting multilateral rules are not incompatible. A multilateral rules-based order promotes global cooperation and creates a level playing field for businesses and jurisdictions, which are important factors for Singapore to remain competitive. While we cannot control what other countries do, we will continue to enhance our overall business environment and invest in areas, such as upskilling our workforce, growing a vibrant innovation ecosystem, and providing quality infrastructure and connectivity.
PAPERCUTS