The Business Times
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SINGAPORE BUDGET 2023

Changes to Singapore’s FDI tax strategy may come only after Budget 2023 

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Elysia Tan

Elysia Tan

Published Thu, Jan 26, 2023 · 05:50 AM
    • Initiatives to attract foreign investment may only come after Budget 2023, as Singapore watches how other jurisdictions adjust to new global tax rules.
    • Initiatives to attract foreign investment may only come after Budget 2023, as Singapore watches how other jurisdictions adjust to new global tax rules. PHOTO: BT FILE

    GLOBAL tax changes could prompt Singapore to find new ways to attract foreign direct investment (FDI), such as tax credit schemes, grants, or industry-specific measures – but this may only happen after Budget 2023, said industry watchers.

    The catalyst is the proposed Global Anti-Base Erosion rules in Pillar Two of the Base Erosion and Profit Shifting (BEPS 2.0) initiative, led by the Organisation for Economic Co-operation and Development.

    The rules introduce a global minimum effective tax rate of 15 per cent for multinational enterprise groups with annual global revenues of at least 750 million euros. This may require countries such as Singapore to introduce top-up taxes, limiting the effectiveness of traditional tax incentives.

    Singapore Budget 2023Singapore economyForeign investmentTaxesInternational tax reformGlobal minimum tax

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