Singapore legislation
Regulation 40
Regulation 40
Post-filing adjustments and tax rate changes
Subregulation 1
If an adjustment is recorded in the financial statements for a financial year in relation to the adjusted covered taxes of a constituent entity for a previous financial year and, had the adjustment been made in the previous financial year, there would not be a decrease in the total adjusted covered taxes for that previous financial year of the constituent entities of the MNE group located in the same jurisdiction, the amount of the adjustment must be taken into account in the adjusted covered taxes of the constituent entity for the financial year in which the adjustment was made.
Subregulation 2
If an adjustment is recorded in the financial statements for a financial year in relation to the adjusted covered taxes of a constituent entity for a previous financial year and, had the adjustment been made in the previous financial year, there would be a decrease in the total adjusted covered taxes for that previous financial year of the constituent entities of the MNE group located in the same jurisdiction, the following must be recalculated for that previous financial year and any subsequent financial year affected by such adjustment, up to the financial year in which the adjustment was made: (a)the adjusted covered taxes of the constituent entity;
if the decrease in the total adjusted covered taxes of the constituent entities of the MNE group results from a reduction in the GloBE income or loss of the constituent entity, the GloBE income or loss of the constituent entity but only to the extent necessary to prevent the top-up amounts of those constituent entities from decreasing;
the effective tax rate (as determined under section 17, including that section as applied by section 22, 23 or 25, or section 24, as the case may be) for the constituent entities of the MNE group located in the same jurisdiction;
the top-up amounts (if any) for those constituent entities,and section 21(4) (or that provision as applied by section 22, 23, 24 or 25, as the case may be) applies accordingly.
Subregulation 3
If the decrease in the total adjusted covered taxes for a financial year of the constituent entities of an MNE group located in a jurisdiction mentioned in paragraph (2) is less than EUR 1 million, the filing entity of that MNE group may elect in a GloBE information return (whether filed in Singapore or in another jurisdiction) in accordance with the GloBE rules for the adjustment mentioned in paragraph (2) to be taken into account in the adjusted covered taxes of the constituent entity for the financial year in which the adjustment was made, and, where such election is effective, the adjustment must be taken into account accordingly.
Subregulation 4
Where an election described in paragraph (3) is not made and the constituent entity offsets a loss arising in a financial year against income of a previous financial year for tax purposes —
the loss is treated as giving rise to a deferred tax asset in the firstmentioned financial year, and regulation 45 applies accordingly; and
the deferred tax asset is deemed to have been used in the previous financial year, and regulation 45 applies accordingly.
Subregulation 5
In paragraphs (1) and (3), the amount to be taken into account in the adjusted covered taxes of the constituent entity for the financial year in which the adjustment was made must be adjusted in accordance with regulation 45(3) or (4), where applicable.
Subregulation 6
Where any tax rate in respect of covered taxes for a constituent entity is reduced to a rate less than the minimum rate, then —
any negative amount of deferred tax expense recognised for a financial year by that constituent entity as a result of that reduction is treated as an adjustment made in that financial year to decrease the corresponding qualifying deferred tax expense of that constituent entity for a previous financial year; and
paragraphs (2) and (3) apply accordingly.
Subregulation 7
Where any tax rate in respect of covered taxes for a constituent entity is increased —
any positive amount of deferred tax expense recognised for a financial year by that constituent entity as a result of that increase is treated as an adjustment made in the financial year as described in sub‑paragraph (b) to increase the corresponding qualifying deferred tax expense of that constituent entity for a previous financial year up to the maximum amount in sub‑paragraph (c);
the adjustment mentioned in sub‑paragraph (a) is made in the financial year when the deferred tax liability recognised as a result of that increase is reversed (on the payment of the deferred tax);
the increase of the corresponding qualifying deferred tax expense mentioned in sub‑paragraph (a) is subject to a maximum of A − B, where —
A is the amount of that deferred tax expense if it had been recognised on the basis of a tax rate equal to the minimum rate; and
B is the original amount of that deferred tax expense; and
paragraph (1) applies accordingly.
Subregulation 8
If any qualifying current tax expense for a financial year of a constituent entity of an MNE group is not paid within 3 years of the last day of that financial year, and the unpaid qualifying current tax expense is more than EUR 1 million —
the unpaid amount must be deducted from the adjusted covered taxes of that constituent entity for that financial year; and
the following must be recalculated for that financial year:
the effective tax rate (as determined under section 17, including that section as applied by section 22, 23 or 25, or section 24, as the case may be) for the constituent entities of the MNE group located in the same jurisdiction;
the top-up amounts (if any) for those constituent entities,and section 21(4) (or that provision as applied by section 22, 23, 24 or 25, as the case may be) applies accordingly.