Multinational Enterprise (Minimum Tax) Regulations 2024

No. S 1062

Multinational Enterprise
(Minimum Tax) Act 2024

Multinational Enterprise
(Minimum Tax)
Regulations 2024

In exercise of the powers conferred by section 84 of the Multinational Enterprise (Minimum Tax) Act 2024, the Minister for Finance makes the following Regulations:

PART 1

PRELIMINARY

Citation and commencement

1.  These Regulations are the Multinational Enterprise (Minimum Tax) Regulations 2024 and come into operation on 1 January 2025.

General definitions

2.—(1)  In these Regulations —

“first in-scope year”, in relation to an entity (X) of or connected to an MNE group, means —

(a) subject to paragraph (b), the first financial year that —

(i) X comes within the scope of the law of any jurisdiction imposing a qualified IIR or a qualified UTPR;

(ii) a chargeable entity of the MNE group becomes liable for MTT in relation to X as a relevant entity or would have been so liable if X were a relevant entity;

(iii) X comes within the scope of the law of any jurisdiction imposing a qualified domestic minimum top‑up tax; or

(iv) in a case where X is located in Singapore or is a section 29(b) entity, the MNE group becomes liable to be registered under Part 4 of the Act,

whichever is earlier; or

(b) where X is eligible for a Transitional CbCR Safe Harbour under regulation 69 or its equivalent under the law of any other jurisdiction — the first financial year that X loses its eligibility for it or that an election is not made to apply it to X;

“June 2024 Administrative Guidance” means the document entitled “Tax Challenges Arising from the Digitalisation of the Economy — Administrative Guidance on the Global Anti-Base Erosion Model Rules (Pillar Two), June 2024” published by the OECD on 17 June 2024;

[S 860/2025 wef 31/12/2025]

“non-marketable transferable tax credit” means a tax credit that is not a qualified refundable tax credit and —

(a) in relation to an entity that is its originator — is not a marketable transferable tax credit and may be transferred to another person or entity; and

(b) in relation to an entity that is its purchaser — is not a marketable transferable tax credit;

“originator”, in relation to a tax credit, means an entity to which the tax credit was originally granted;

“other comprehensive income”, in relation to an entity of or connected to an MNE group, means items of income and expense that are not recognised in the profit and loss account, as required or permitted by the authorised financial accounting standard used in preparing the consolidated financial statement of the ultimate parent entity of the MNE group or the joint venture of the JV group, as the case may be;

“purchaser”, in relation to a tax credit, means an entity that purchases the tax credit from another entity;

“qualified refundable tax credit” means a tax credit (or an amount of a tax credit) which must be paid in cash or cash equivalent to an entity within 4 years of the entity meeting the conditions for such payment under the law of the jurisdiction granting the tax credit, but does not include a tax credit in respect of a qualified imputation tax (as defined in paragraph 1(7) of the First Schedule to the Act) or a disqualified refundable imputation tax (as defined in paragraph 1(7) of the First Schedule to the Act).

(2)  In these Regulations, an entity is a “hybrid entity” with respect to any of its income, expenditure, profit or loss that is attributable to an ownership interest in the entity, if it is not a flow‑through entity, but is fiscally transparent with respect to that income, expenditure, profit or loss under the law of the jurisdiction in which the owner is located.

[S 860/2025 wef 31/12/2025]

(3)  In these Regulations —

(a) a tax credit or an amount of a tax credit (not being a qualified refundable tax credit) is a “transferable tax credit” in relation to an entity that is its originator if, under the law of the jurisdiction granting the tax credit, the tax credit may be transferred by the originator to a party unrelated to the originator in the financial year in which the tax credit was granted to the originator or within 15 months after that financial year; and

(b) a tax credit or an amount of a tax credit (not being a qualified refundable tax credit) is a “transferable tax credit” in relation to an entity that is its purchaser if, under the law of the jurisdiction granting the tax credit, the tax credit may be transferred by the purchaser to a party unrelated to the purchaser in the same financial year in which the tax credit was acquired by the purchaser, and such transfer would not be subject to more stringent restrictions than the transfer of the tax credit by the originator to any purchaser.

(4)  In these Regulations —

(a) a transferable tax credit or an amount of a transferable tax credit of an entity that is its originator is a “marketable transferable tax credit” in relation thereto if —

(i) in a case where the tax credit is transferred by the originator to a party unrelated to the originator within 15 months of the end of the financial year in which the tax credit was granted to the originator (called in this paragraph the relevant period) — the transfer is at a price not less than 80% of the net present value of the tax credit; or

(ii) in a case where the tax credit is not transferred by the originator, or is transferred by the originator to a party related to the originator, within the relevant period — tax credits of the same type are traded between unrelated parties in the relevant period, and typically at a price not less than 80% of the net present value of the tax credit traded; and

(b) a transferable tax credit or an amount of a transferable tax credit of an entity that is its purchaser is a “marketable transferable tax credit” in relation thereto if the tax credit is acquired by the purchaser from a party unrelated to the purchaser at a price not less than 80% of the net present value of the tax credit.

(5)  In paragraph (4), the net present value of a tax credit is computed on the basis of the return on debt instruments issued by the government of the jurisdiction granting the tax credit —

(a) that have a maturity similar to the period for the use of the tax credit after it is granted to the originator (in the case of paragraph (4)(a)) or acquired by the purchaser (in the case of paragraph (4)(b)), up to a maximum maturity of 5 years; and

(b) that are issued in the financial year in which the tax credit is transferred by the originator or to the purchaser (as the case may be) or, if the tax credit is not transferred by the originator, in the financial year in which the tax credit is granted to the originator.

(6)  In paragraph (5) —

(a) the tax credit is the face value of the credit or the remaining creditable amount in relation to the tax credit; and

(b) the cash flow projection to be factored in the net present value calculation is based on the maximum amount that can be used each year under the legal design of the credit.

(7)  In paragraphs (3) and (4), a party is related to another party if —

(a) one party owns (directly or indirectly) 50% or more of the ownership interests in the other party, and 50% or more of the voting rights in that other party (if that other party is a company);

(b) another party owns (directly or indirectly) 50% or more of the ownership interests in both parties, and 50% or more of the voting rights in each of the parties that is a company;

(c) either party directly or indirectly controls the other party; or

(d) one or more other parties directly or indirectly control both parties,

and a party is unrelated to another party if none of the circumstances mentioned in sub‑paragraphs (a) to (d) are present.

(8)  A reference to a section in these Regulations is to a section of the Act.

Application of Parts in determining top-up amounts of entities for Part 3 of Act

3.  Except as otherwise provided, and without affecting the application of the other Parts, Parts 4, 5, 6, 7, 8, 10 and 11 apply (with the modifications set out in those Parts) for the purpose of determining the top-up amounts of entities in section 29, and for this purpose a reference to a section in Part 2 of the Act or a provision in the First Schedule to the Act is to that section or provision as applied by section 30.

Made on 27 December 2024.

LAI CHUNG HAN

Permanent Secretary (Development),
Ministry of Finance,
Singapore.

[AG/LEGIS/SL/190C/2020/3]