Singapore legislation
Regulation 31
Regulation 31
Election to reflect deductions for stock-based compensation
Subregulation 1
The filing entity of an MNE group may make an election in a GloBE information return (whether filed in Singapore or in another jurisdiction) in accordance with the GloBE rules that the constituent entities of the MNE group located in a jurisdiction are to adjust their FANIL to take into account as an expense the amount deducted for tax purposes in that jurisdiction for any stock‑based compensation incurred by those constituent entities in lieu of the expense otherwise recognised for the stock‑based compensation.
Subregulation 2
If an election in paragraph (1) is effective for a financial year in relation to the constituent entities located in a jurisdiction, the FANIL for that financial year of each of those constituent entities must be adjusted as follows:
the amount that was allowed to the constituent entity as a deduction for tax purposes for that financial year in that jurisdiction for any stock‑based compensation is treated as the expense for the stock‑based compensation in lieu of the expense that would otherwise be recognised for the stock‑based compensation;
where any stock-based compensation is an option that expires without exercise in the financial year, the total amount of the expenses recognised in previous financial years under sub‑paragraph (a) in respect of that stock‑based compensation is treated as income.
Subregulation 2A
Where an election in paragraph (1) is effective as described in paragraph (2) and an amount of stock-based compensation expense that was deducted for tax purposes is added to the carrying value of an asset, that amount so added must be excluded in determining the GloBE income or loss arising from that asset.
Subregulation 3
Where an election in paragraph (1) is made and —
expenses for stock-based compensation were taken into account in the FANIL of a constituent entity in any financial year before the election was effective; and
the sum of those expenses exceeds the sum of what those expenses would have been under paragraph (2)(a) had the election been in effect for that financial year,the FANIL of that constituent entity for the first financial year for which the election is effective must be adjusted to include the amount of that excess as income.
Subregulation 4
Where an election in paragraph (1) is revoked, then, if —
any stock-based compensation for which an expense has been recognised for a constituent entity in accordance with paragraph (2)(a) has not been paid on the first day of the first financial year for which the election ceases to apply; and
the total amount of expenses recognised in accordance with paragraph (2)(a) for that stock‑based compensation exceeds the total amount of expenses that would have been recognised for that stock-based compensation had the election not been made,the FANIL of that constituent entity for the first financial year for which the election ceases to apply must be adjusted to include the amount of that excess as income.
Subregulation 5
An election under paragraph (1) must not be revoked for the financial year for which it is made or for any of the subsequent 4 financial years, and any such revocation has no effect.
Subregulation 6
If an election under paragraph (1) is revoked for a financial year, another election under that paragraph must not be made (whether in Singapore or in another jurisdiction) in respect of the constituent entities located in that jurisdiction for that or any of the subsequent 4 financial years, and any such election has no effect.