Singapore endorses G-20 tax reforms, paving way for overhaul of tax system: Lawrence Wong

A LANDMARK global agreement on new rules for international corporate tax has been endorsed at the Group of 20 (G-20) meeting in Italy.

Besides the G-20, an overwhelming majority of the jurisdictions in the Inclusive Framework, including Singapore, have also endorsed the broad shape of the tax reforms, Singapore Finance Minister Lawrence Wong noted in a Facebook post over the weekend.

"This paves the way for a major overhaul of the tax system, with the most significant changes in tax rules in over a century," said Mr Wong, who is attending the G-20 meetings in Venice.

"There is still some work to be done, and several design parameters to be worked out. Singapore, like many others, looks forward to finalising these design elements by the next G-20 meeting in October."

He added that at the G-20 discussion on Saturday, he spoke about the "need to recognise substantive economic activities in the design parameters and the importance of ensuring consistent and timely implementation to allow big and small economies to compete on an equal footing".

"Tax systems, besides raising revenue, should continue to encourage innovation, growth and jobs," Mr Wong said in the post.

Bloomberg reported on July 10 that the agreement endorsed at the G-20 meeting aims to revamp rules that have allowed major companies to save billions by shifting profits to low-tax jurisdictions.

A total of 132 countries this month backed the two-pillar accord at the Organisation for Economic Cooperation and Development (OECD) that seeks to address that situation with a global minimum rate, as well as making multinational companies pay more in places where they operate rather than where they are headquartered.