MOF seeks comments on proposed Finance (Income Taxes) Bill

29 June 2026

On 8 June 2026, the Ministry of Finance (“MOF”) published a consultation paper on the proposed Finance (Income Taxes) Bill (“Bill”). The Bill proposes amendments to the Income Tax Act 1947 (“ITA”) and the Multinational Enterprise (Minimum Tax) Act 2024 (“MMTA”) to effect:

  • Tax measures announced at Budget 2026;
  • Changes arising from MOF’s periodic review of Singapore’s income tax system; and
  • Changes related to the Pillar Two Global Anti-Base Erosion Model Rules.

The consultation closes on 1 July 2026.

Proposed amendments to the ITA

The amendments to give legislative effect to tax measures announced at Budget 2026 include:

  • Enhancing the Enterprise Innovation Scheme: To support businesses in adopting AI, the Enterprise Innovation Scheme will be enhanced for years of assessment 2027 and 2028. Businesses will be allowed to claim tax deductions of 400% on up to S$50,000 of qualifying AI expenditures incurred for each year of assessment. The Sectoral AI Centre of Excellence for Manufacturing will be added as a partner institution for qualifying innovation projects, for which businesses are eligible for a 400% tax deduction on qualifying expenditures incurred.
  • Corporate Income Tax Rebate: To provide support for companies to manage cost pressures, a Corporate Income Tax Rebate of 50% of the corporate tax payable will be provided in year of assessment 2026. Active companies that have employed at least one local employee in calendar year 2025 will receive a minimum benefit of S$2,000 in the form of a Corporate Income Tax Rebate Cash Grant. The total maximum benefit that a company may receive is S$40,000.
  • 250% tax deduction for qualifying donations: To continue supporting a culture of giving in Singapore, the 250% tax deduction scheme will be extended by three years until 31 December 2029. Qualifying donations include cash donations to Institutions of a Public Character and the Singapore Government, as well as eligible in-kind donations (e.g. gifts of artefacts to approved museums).

For more on the tax measures announced at Budget 2026, please refer to our article “Budget 2026: Summary of key tax changes and initiatives”.

The amendments arising from MOF’s periodic review of Singapore’s income tax system include requiring companies to use IRAS’ e-service to file objections and revisions to their tax assessments.

Proposed amendments to MMTA

The two proposed amendments to the MMTA seek to implement the following:

  • The Side-by-Side Safe Harbour under the Side-by-Side package approved by the OECD Inclusive Framework on Base Erosion and Profit Shifting on 5 January 2026. The Side-by-Side Safe Harbour effectively exempts the income of multinational enterprise (“MNE”) groups, which are headquartered in a jurisdiction with a qualified side-by-side regime, from the application of the Income Inclusion Rule and the Undertaxed Profits Rule in other jurisdictions. To ensure that Singapore’s multinational enterprise top-up tax meets international standards, legislative amendments are proposed to be made to allow the Minister for Finance to make regulations to implement the Side-by-Side Safe Harbour. The legislative amendments will apply to MNE groups for financial years beginning on or after 1 January 2026.
  • The Global Anti-Base Erosion information return exchange framework. These amendments ensure that Singapore’s Pillar Two regime meets international standards and eases the compliance burden for multinational enterprise groups. On 14 April 2026, Singapore signed the Multilateral Competent Authority Agreement on the exchange of GloBE information. The agreement formalises the automatic exchange of such information between tax administrations and will ease the compliance burden for affected MNE groups headquartered in Singapore. The proposed legislative amendments will: (i) allow Singapore to exchange relevant GloBE information with other tax administrations; (ii) require MNE groups to file GloBE information returns with the Inland Revenue Authority of Singapore (“IRAS”) if IRAS does not receive such information from the relevant tax administration within the stipulated deadlines; and (iii) apply existing penalties for non-compliance and inaccurate filings to filings under (ii).

Reference materials

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