eOASIS is Rajah & Tann Singapore LLP's legal information website for clients, containing business and legal information prepared from a practitioner's viewpoint. It has four different modules, updated regularly, and materials range from commentaries on the latest legal developments to key legal and business information.
MOF Launches Two Consultations on Implementation of BEPS 2.0 Pillar Two, Amendments to Income Tax Act
In February 2024, a suite of tax measures was announced in Singapore's Budget 2024, including the upcoming implementation of Pillar Two of the Base Erosion and Profit Shifting 2.0 ("BEPS 2.0") on 1 January 2025.
On 10 June 2024, the Ministry of Finance ("MOF") launched two public consultations on two Bills to implement the tax measures from Budget 2024:
- Consultation on the Multinational Enterprise (Minimum Tax) Bill ("MNE Bill") and the Multinational Enterprise (Minimum Tax) Regulations 2025, regarding the implementation of BEPS 2.0 Pillar Two; and
- Consultation on the Income Tax (Amendment) Bill 2024 ("ITA Bill"), which proposes 15 amendments to the Income Tax Act 1947 ("ITA") to effect measures announced in Budget 2024 and seven amendments arising from MOF's periodic review of Singapore’s income tax regime.
The MNE Bill, in particular, signals a major change to Singapore's tax regime by introducing a minimum effective tax rate of 15% for large multinational entity (MNE) groups pursuant to the Global Anti-Base Erosion Model Rules (GloBE Rules).
The consultations will run from 10 June 2024 to 5 July 2024, with MOF to provide a summary of responses in September 2024.
In this Update, we provide an overview of the two Bills.
The Significant Investments Review Act – Balancing National Security and Investment Opportunities
The Significant Investments Review Act 2024 ("Act"), which came into force on 28 March 2024, sets out a new investment management regime that applies to both local and foreign investors for entities that are critical to Singapore's national security interests. The Act reflects Singapore's proactive and adaptive approach to economic and security challenges, positioning the nation as a global leader in responsible and secure investment practices. It also follows the growing trend worldwide for governments to carefully screen foreign investments in sensitive sectors.
On 31 May 2024, the list of the first entities to be designated under the Act was published in the Government Gazette and on the Office of Significant Investments Review website. The nine entities are ST Logistics Pte. Ltd, Sembcorp Specialised Construction Pte. Ltd. ST Engineering Marine Ltd, ST Engineering Land Systems Ltd, ST Engineering Defence Aviation Services Pte. Ltd, ST Engineering Digital Systems Pte. Ltd., ExxonMobil Asia Pacific Pte. Ltd, Shell Singapore Pte, Ltd and Singapore Refining Company Private Limited.
In this Update, we first consider key requirements of the Act and then consider the current list of entities designated under the Act.
Vietnam Supreme Court Upholds Recognition and Enforcement of ICC Arbitral Award in Landmark Decision
In its landmark decision in Decision 03/2023/KN-KDTM, the Supreme People's Court of Vietnam ("Supreme Court"), the country's apex court, recognised and enforced an arbitral award issued under the 2017 Rules of Arbitration of the International Chamber of Commerce ("ICC Rules").
The proceedings before the Supreme Court concerned interesting, and important, questions on the interaction between the ICC Rules and the 2010 Law on Commercial Arbitration ("LCA"), the relevant legislation governing arbitration in Vietnam. Article 61 of the LCA requires an arbitral award to be issued within 30 days after the end of the last hearing date. However, is this deadline mandatory or is it subject to modification by the timelines in the ICC Rules?
In a decision reflecting the pro-arbitration stance of the Vietnamese courts, the Supreme Court held that the ICC Rules takes precedence. This decision has provided much needed clarity and certainty on the recognition and enforcement of ICC awards in Vietnam.
The successful award creditor was represented in the ICC arbitration and the Vietnamese court proceedings by Dr Chau Huy Quang (Managing Partner), Logan Leung (Deputy Managing Partner), Quach Vu An Khoa (Senior Associate), Luong Hoang Quy (Associate), Nguyen Dang Ngoc (Associate) of Rajah & Tann LCT, and Sim Chee Siong (Head, Construction & Projects) of Rajah & Tann Singapore.
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