Finance (Income Taxes) Bill passed in Parliament

27 November 2025

On 6 November 2025, the Finance (Income Taxes) Bill (“Bill”) was passed in Parliament. The Bill seeks to keep Singapore’s tax system up to date, responsive to industry needs, and aligned with global tax developments.

This article provides an overview of the key amendments introduced by the Bill as outlined by Senior Minister of State for Finance Jeffrey Siow in his opening speech at the second reading of the Bill.

The Bill seeks to (i) amend the Multinational Enterprise (Minimum Tax) Act 2024 to incorporate updates to the Pillar Two rules under the international Base Erosion and Profit Shifting (BEPS) 2.0 initiative; and (ii) bring into legal effect several tax measures announced in the 2025 Budget Statement.

Amendments to Multinational Enterprise (Minimum Tax) Act 2024

The Multinational Enterprise (Minimum Tax) Act 2024 was enacted to implement the Domestic Top-up Tax and the Multinational Enterprise Top-up Tax under the Pillar Two rules. The rules require large multinational enterprises to pay a minimum effective tax rate of 15% wherever they operate. Both top-up taxes apply to businesses’ financial years commencing on or after 1 January 2025.

Since the enactment of the Multinational Enterprise (Minimum Tax) Act 2024, the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework has published new technical clarifications on the Pillar Two rules. The Bill seeks to incorporate these and other technical clarifications into Singapore’s legislation to keep Singapore’s regime up to date and consistent and recognised by other jurisdictions. This will provide certainty to businesses, ease their compliance burdens, and relieve them from having to pay Pillar Two taxes elsewhere in respect of their Singapore operations.

Amendments to Income Tax Act 1947

Key amendments to the Income Tax Act 1947 include changes to corporate income tax to ensure Singapore’s tax system remains responsive to business needs and practices.

A 100% tax deduction will be introduced for expenses incurred by businesses on green certificates or credits. This is in response to feedback from businesses for more support in their sustainability journeys. Currently, such tax deductions are only available when certificates or credits are surrendered or retired to meet statutory requirements. With this amendment, tax deductions will now also apply if these certificates or credits are used to meet sustainability commitments.

The Bill will also introduce the following tax incentives recommended by the Equities Market Review Group to encourage new listings in Singapore’s equities market and increase investment demand for Singapore-listed equities:

  • A 20% or 10% Listing Corporate Income Tax Rebate for companies that complete a primary or secondary listing respectively with shares offered in conjunction with the listing, subject to caps.
  • A 5% concessionary tax rate on qualifying income for new fund manager listings in Singapore.
  • A tax exemption on fund managers’ qualifying income from funds with at least 30% allocation to Singapore-listed equities.

Reference materials

The following materials are available on the Parliament website www.parliament.gov.sg and the MOF website www.mof.gov.sg: