A new lease of life for Singapore’s legacy tax incentives
Policymakers should consider the value in leveraging and re-purposing some of Singapore’s legacy tax incentives in the coming year.
HELLO World may have been the theme song of the recent Olympics held in Paris, but in the realm of international taxation, another “bonjour le monde” took centre stage in the French capital.
On Sep 19, 2024, the Organisation for Economic Co-operation and Development (OECD) hosted a signing ceremony to facilitate the implementation of the Subject to Tax Rule (STTR). This marked a significant milestone in the Base Erosion and Profit Shifting (BEPS) framework, delivering on the OECD’s objective of reforming international tax rules for a stronger and fairer global tax system.
Overview and mechanics of the STTR
According to the OECD, the STTR is “designed to help developing countries – notably those with lower administrative capacities – to protect their tax base”. It is a key feature that allows participating countries to limit tax treaty benefits or impose withholding tax at source (that is, in the payer’s jurisdiction) where certain items of income are not subject to a minimum tax rate.
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