Singapore Pillar Two Registration Process January 2026

Summary

In October 2024, The Parliament of Singapore passed the Multinational Enterprise (Minimum Tax) Act,2024 (MMT Act). The provisions of the act are applicable from the financial year starting on or after 1^st January 2025. The MMT Act requires MNE groups that meet the applicability criteria to register the group.

In line with the above requirements, The Inland Revenue Authority of Singapore (IRAS”) has released the draft registration form and process for submitting the form’. Registration is expected to start from May 2026. Failure to register may result in a 10% surcharge on any applicable tax payable under the MMT Act.

The Ultimate Parent Entity can appoint a subsidiary or a local tax agent to act as its representative. Registration requires disclosure of all entities operating in Singapore and their classification in accordance with the MMT Act. The details on the applicability and contents of the registration form are provided below.

Applicability

1. Introduction

The OECD/G20 Inclusive Framework introduced measures to limit base erosion and prevent large multinational enterprises (MNEs) from shifting profits to low- tax jurisdictions, through BEPS Action Plans. As a continuum of this initiative, Pillar Two rules were introduced, aiming at minimum effective tax rate of 15% in each jurisdiction.

As part of Inclusive Framework, Singapore has enacted the Multinational Enterprise (Minimum Tax) Act 2024 (MMT Act), This Act introduced two key provisions:

• Multinational Enterprise Top- Up Tax (MTT) – the local implementation of the Income Inclusion Rule (IIR) under Pillar 2.
• Domestic Top- Up Tax (DTT) – Singapore’s equivalent of the Qualified Domestic Minimum Top- Up Tax (QDMTT).

Under the MMT Act, an MNE group is considered in- scope if it meets both of the following criteria:

1. The group has an annual consolidated revenue of €750 million or more for its Ultimate Parent Entity (UPE) in at least two of the four preceding financial years.
2. The group has at least one Constituent Entity (CE) or Joint Venture located in Singapore, or at least one Reverse Hybrid Entity that is incorporated or registered in Singapore.

These rules ensure that Singapore- based entities within large MNE groups comply with global minimum tax standards while maintaining alignment with the OECD/G20 Pillar 2 framework.

2. Registration Requirement

The UPE of an in- scope MNE group must register for the MMT Act within six months after the end of the first financial year to which the Act applies. The online registration form will be available from May 2026. For UPEs with a calendar year 2025 as their accounting year, the registration deadline is 30 June 2026. For UPEs with a financial year ending March 2026, the registration deadline is 30 September 2026.

UPE can designate a local Constituent Entity or appoint a local tax agent to register the group. A letter of Authorization, explicitly authorizing the representative to act on behalf of UPE, must be attached with the registration form.

Additionally, the UPE must designate a single Singapore CE as the Designated Local DTT filling entity as well as GloBE Information Return (GIR) filing entity.

If the MNE group only has excluded entities operating in Singapore, registration is not required, provided these entities are correctly treated as excluded entities in the GIR.

In the event of errors discovered after submission, IRAS recommends not re- submitting the form. Instead, the UPE should notify IRAS by email with the subject title as “Correction to Registration From <acknowledgment number of the original submission>, along with group/UPE name, UPE TIN, details of the incorrect entries, and the required amendments.

3. Information Required for Registration

The following are the details to be included in the registration form.

In the end IRAS requires the Ultimate Parent Entity (“UPE”) to declare that the information provided in the registration form is true and complete. Penalties are attracted for an incorrect declaration.

Where errors are identified after submission, the registration form should not be re- submitted. Instead, UPE is required to notify IRAS by email.

Post Registration

IRAS will acknowledge receipt by email and typically process within ~1 month (longer if information is incomplete). Upon approval, letters will be sent to Singapore- located CEs/JVs/JV- subs/excluded entities and reverse hybrids, and to responsible members for MTT (if applicable).

Non-compliance Consequence

A 10% surcharge on DTT and MTT (if applicable) may be imposed if an in- scope MNE group fails to notify its registration liability under the MMT Act.

Conclusion

Currently over 55 jurisdictions have implemented Pillar Two rules in their tax laws, including traction among several other jurisdictions w.r.t. implementation of GloBE rules. In several mature tax jurisdictions, effective financial year for which Pillar Two is effective has concluded and the timelines for various compliances w.r.t. GloBE rules would fall in 2026.

In Singapore, the IRAS has notified the Registration requirement for applicable MNE Groups. Registration requires information to be provided about the MNE group including details of the UPE, CEs, designated filing entity. This registration should not be viewed simply as a simple form filling exercise. Rather, it would require wholistic understanding of the impact of GloBE rules on the Group, to correctly provide information in the registration form. Further, as there is surcharge on non- compliance of registration, MNE Group would have to be Pillar Two ready.

How VSTN can support

VSTN offers support on Pillar Two including:

• Impact & readiness assessments: Scoping, safe harbour eligibility, and jurisdictional ETR modelling
• Technical interpretation & advisory: GloBE income, covered taxes, deferred tax adjustments, QDMTT design, quantifying top- up tax liability and alignment with transfer pricing, CbCR and overall tax strategy.
• Data, systems, and process support: Data gap analysis, calculation models and updating accounting and reporting systems.
• Compliance and reporting assistance: GloBE calculations, GIR / QDMTT returns and related disclosures in financial statements.
• Governance, audit, and controversy support: Documentation and internal controls
• Ongoing regulatory monitoring: Tracking OECD guidance and local law developments and assessing client- specific impact.

THE NETFLIX RULING – UNRAVELLING THE
DIGITAL DISTRIBUTION CONUNDRUM

A. Introduction

The Hon’ble Mumbai Bench of the Income Tax Appellate Tribunal (ITAT/the Tribunal) has delivered a pivotal ruling in Netflix Entertainment Services India LLP¹, which throws light on the transfer pricing treatment of digital/platform- based businesses. The epicentre of the ruling is about the functional characterisation of Netflix India wherein the Tribunal evaluated the facts and circumstances of the taxpayer through the transfer pricing lens and beyond the superficial economic reconstruction portrayed by the tax authorities.

The Tribunal critically examined various key aspects such as the selection and application of the Most Appropriate Method (TNMM vs. “Other Method”), the scope of recharacterization under Indian TP rules, and the interpretation of intellectual property rights and Development, Enhancement, Maintenance, Protection, Exploitation (“DEMPE”) functions in the context of digital streaming models.

B. Background

Overview

Netflix Inc. (“Netflix US”) is the owner of Netflix platform offering video on- demand globally and it offered official distribution rights to Netflix International B.V. (“NIBV”), a Netherlands- based affiliate, which managed non- U.S. territories until December 2020.

Netflix India was incorporated in April 2017 to distribute access to the global Netflix Service in India under a non- exclusive Distribution Agreement, initially with Netflix international B.V. (effective September 2017) and, from January 2021, directly with Netflix US. Under this agreement. Netflix India was authorised to promote subscriptions, invoice customers, collect subscription fees, and provide limited customer support, while all intellectual property rights including content, technology, and trademarks, remained exclusively with Netflix US/NIBV.

Factual matrix

Further Netflix India does not own or develop any intangible assets, nor does it perform DEMPE functions. Its tangible assets comprise routine office equipment and certain Open Connect Appliances (OCAs), which are cache servers deployed at ISP nodes to optimize streaming efficiency akin to logistical tools rather than core technology assets.

This structural model, based on cost- plus remuneration and risk insulation, formed the basis of Netflix India’s transfer pricing position, which became the focal point of debate.

Intercompany Arrangements

The following intercompany arrangements governed Netflix India’s operations:

Transfer pricing scrutiny

i. Transfer Pricing Officer

The Transfer Pricing Officer (TPO), however, challenged both the characterization and the benchmarking approach, asserting that:

• Netflix India was not a mere distributor but an entrepreneurial provider of content and technology, bearing significant risks and performing high-value functions.
• The TNMM was “unscientific” and unsuitable for the complex OTT streaming model; instead, the TPO invoked the “Other Method” under Rule 10AB, imputing a royalty-based approach
• By sourcing six unrelated royalty agreements from the RoyaltyStat database, the TPO computed an arm’s-length royalty rate of 57.12% of revenue, resulting in a transfer pricing adjustment of 1 444.93 crore.

ii. DRP Approach

The DRP substantially endorsed the TPOs position, which was premised on recharacterizing Netflix India from a limited- risk distributor to a full- fledged entrepreneurial operator in the Indian market. The key findings of the DRP are as below:

• Functional Recharacterization
  Netflix India undertook a “plethora of functions” beyond mere distribution of access. It enumerated fifteen activities, including entering into user agreements, promoting the Netflix Service, issuing gift subscriptions, providing infrastructure support, etc., Ownership of OCAs was viewed as evidence of investment risk, elevating Netflix India’s profile to that of a significant technological and operational hub rather than a routine distributor.

Rejection of TNMM and Assessee’s Comparables

Dismissed TNMM adopted by the assessee as “unscientific, misdirected, and incompatible” with the business model and criticized use of software distributors as comparables. It also rejected asset- intensity and marketing- intensity adjustments furnished by the assessee, terming them baseless.

Endorsement of Royalty-Based ‘Other Method’

The Panel reasoned that Royalty based approach better reflected the economic substance of Netflix India’s operations and thereby affirmed TPO’s invocation of Rule 10AB and upheld adoption of “Other Method” as MAM. It endorsed benchmarking based on six unrelated royalty agreements sourced from the RoyaltyStat database, three for content rights and three for technology platform rights, resulting in a blended royalty rate of 57.12% of revenue.

Introduction of Ad-hoc Attribution Model

Devised an alternative attribution grid, allocating arbitrary percentages to functional clusters (e.g., content storage 5% , marketing 5% , technology 5% ) and concluded that 43% of revenue should be attributed to Netflix India.

C. Key Disputes

At the outset, the key disputes emanating from the ruling are:

1. Netflix India’s characterization – Limited-risk distributor Vs an entrepreneurial content-and-technology provider?
2. MAM – TNMM Vs Other Method based on royalty rates under Rule 10AB?
3. Remuneration – Distribution fee Vs. Royalty?
4. Ownership of Open Connect Appliances ((OCAs) – Logical tools Vs. Deployment of significant technological asset?
5. Whether the comparables selected by Netflix India (software and product distributors) were functionally appropriate?

D. Analysis and Tribunal’s Standpoint

The Tribunal undertook a detailed review of Netflix India’s functional profile, contractual framework, and transfer pricing methodology vis-à- vis Indian TP regulations.

A quick glance at the key disputes and the Tribunal’s position is provided below:

Final outcome

• Netflix is a limited risk distributor
• TNMM upheld as MAM
• Royalty-based approach rejected and DRP’s ad-hoc attribution model rejected as legally unsustainable and economically flawed
• Entire TP adjustment of 1 444.93 crore deleted

In essence, the ruling reaffirms that contractual and functional realities must prevail over speculative recharacterization, and that TNMM remains the most reliable method for routine distribution models in the digital economy.

E. Key learnings / takeaways

This decision sheds light on fundamental principles such as method selection, comparability standards and the treatment of digital infrastructure assets and is expected to shape the approach toward benchmarking transactions in the OTT, SaaS, and e- commerce sectors globally.

It vehemently underpins that the tax authorities cannot attempt to paint genuine intercompany arrangements as sham, especially in digital businesses, by imputing royalty or entrepreneurial returns. While the Tribunal’s conclusions are firmly grounded in Indian transfer pricing regulations and judicial precedents,

the case also offers an opportunity to reflect on its interplay with global transfer pricing framework. A snapshot of the key learnings is provided below:

Need for robust documentation

Robust documents such as intercompany agreements anchored the Tribunal’s analysis. The Distribution Agreement explicitly appointed Netflix India as a non exclusive distributor of access and reserved all IP rights (content, technology, trademarks) to NIBV/Netflix US, which the Tribunal treated as decisive on functional characterization. The Terms of Use with subscribers mirrored this, granting only a limited, non exclusive right to access and view content, not any ownership or exploitation rights. Hence this ruling is a testament that clear drafting of contracts capturing the rights and duties of the parties, IP ownership, etc., are essential.

Recharacterization of business profile

This ruling has poised a notable point that recharacterization cannot be done by the authorities on a customary basis. If the taxpayer is able to demonstrate the alignment of conduct of parties with the underlying contract with concrete evidence it would ringfence the taxpayer from such recharacterization

Across jurisdictions, taxpayers operate through various business models and a thorough understanding of the business dynamics is essential in order to determine the remuneration model. In recent times sizeable number of entities in India are operating in SaaS / digital environment. While India being the second largest eco- system for start- up enterprises, thorough understanding of their complex business structure and suitable billing model i.e., whether it warrants a royalty- based approach or it is a mere distribution model expecting a routine return, etc., acts as a prerequisite.

Asset profiling

In determining the characterisation of a taxpayer and the resultant remuneration model, apart from the functional analysis, the presence and deployment of asset play a pivotal role. In the present case, the assets in the form of OCAs deployed by Netflix India are considered to be integral part of offering seamless Netflix streaming service to the customers whereas Tribunal had pondered over the quantum of assets employed by Netflix India vis- à- vis the AE. While the quantum of assets may not be significant, however one must evaluate the impact, it has on the revenue model of the taxpayer, due to the absence of such assets and accordingly the weightage to be determined.

Importance of DEMPE

The Tribunal has deliberated on the importance of DEMPE analysis as it is relevant to understand the transaction from the perspective of value creation. Hence while structuring IP related transaction, one needs to perform DEMPE analysis as a part of the functional profiling of the taxpayer.

Bottom Line

This ruling emphasises a noteworthy aspect that the law does not permit tax authorities to take shelter under the name of complex business models to recharacterize transactions. The Tribunal’s approach by relying on contractual arrangements, the FAR profile, and the binding judicial precedents (i.e., Supreme court ruling on Engineering Analysis), reiterates the importance of maintaining robust documentation by the taxpayers.

The Tribunal reaffirmed that contractual terms and the actual FAR profile govern transfer pricing outcomes under the transfer pricing regulations. By upholding TNMM and rejecting royalty- based and ad- hoc attribution approaches, the ruling underscores that complex business models cannot justify arbitrary recharacterization.

(Inputs contributed by Ayush Agrawal – Assistant Manager at VSTN Consultancy Private Limited.

The authors are part of VSTN Consultancy Private Limited, Transfer Pricing boutique firm and can be reached at snithya@vstnconsultancy.com, ranjani@vstnconsultancy.com and ayusha@vstnconsultancy.com)

APA – Corporate Tax guide

United Arab Emirates

January 2026

Background

The Federal Tax Authority (FTA) has released the much-awaited UAE APA guide in December 2025. The guide provides comprehensive insights into the APA programme including procedures, monitoring and review mechanisms and will support taxpayers in making an informed decision on opting for the APA scheme. While the APA guidelines are not legally binding, it has been published to assist taxpayers in understanding the APA programme under the Corporate Tax regime in the UAE.

Key Features of the APA programme

1. Overview

The APA programme offers a voluntary mechanism for a Person to enter into an agreement with the FTA for determining the Arm’s Length Price of Controlled Transactions over a period of time in advance and prevent the risk of TP disputes and litigation. An APA shall be binding on the person who has entered into the agreement and the FTA.

For domestic APAs, counterparty to the transaction should also comply with the terms of the APA, though for the purpose of legal effect, there is a reference that it is binding only on the signatories to the APA.

2. Types of APAs

APAs can be categorized into three types:

• Unilateral APA: Agreement between a person and the FTA for domestic and cross border Controlled Transactions
• Bilateral APA: Agreement between competent authorities of two jurisdictions reached through a Mutual Agreement Procedure (‘MAP’).
• Multilateral APA: Set of agreements between competent authorities of more than two jurisdictions reached through a MAP.

Currently, a phased rollout has been adopted with only unilateral APAs introduced initially, with subsequent expansion to bilateral and multilateral agreements.

3. Eligibility Criteria

A Person may apply for an APA if there are significant uncertainties in determining the appropriate criteria for establishing the Arm’s Length Price of proposed or existing Controlled Transactions such as cases involving:

• Complex Business operations or Controlled Transactions
• Where such Controlled Transactions have been historically subject to audit.

Transactions that fall under Safe Harbour provisions, including low value adding intra-group services are excluded from the purview of APA. Cross border transactions as well as Domestic Controlled Transactions may be covered under an UAPA if the Person and its domestic Related Party are subject to different tax rates or are eligible for any tax incentives under the Corporate Tax Law.

APA applications can be rejected under various circumstances – including limited scope of transactions and where ALP can be reliably applied; shifting the focus to applications for complex business arrangements for which tax certainty is required.

4. Threshold

A person can apply for an APA if it meets the materiality threshold of Controlled Transactions of AED 100 million per tax period. Only the value of transactions that are proposed to be included in the APA should be included. A person not meeting the threshold criteria may still apply for an APA, if they could provide robust justification on why an APA would help ensure compliance and certainty in such cases.

An application can be accepted even where the threshold is not met and can be rejected even if the threshold is met, emphasizing that the focus is on the nature and complexity of transactions and not merely the quantum.

5. Who can apply

A pre-filing consultation and APA application must be filed by a Person, its Tax Agent (registered for CT purposes with FTA) or Legal Representative on behalf of the Person. In case of a Tax group, only the Parent company of that tax group is permitted to submit the APA.

Applications and any other information required during the APA process can be submitted from 30 December 2025 by email to APA@tax.gov.ae or via EmaraTax (from the date to be announced).

6. APA Revision, Cancellation & Renewal

• Revision/ cancellation
  APA may be revised if there is any change in the law, business or economic conditions or exceptional circumstances. A Person must self-assess the need to revise an APA and intimate the FTA within 20 Business Days from such event. The FTA can also initiate revision at its discretion.
• Revocation/ cancellation
  FTA may revoke or cancel an APA in the following cases:
  • Material misrepresentation or wilful defaults
  • Failure to comply with material terms and conditions of APA
  • Breach of one or more critical assumptions

  Revocation shall take effect from the first tax period covered under APA. In case of cancellation, it will be prospective. For the years when the APA is not valid, the taxpayer will be subject to routine audit.

• Renewal
  A Person may opt for a renewal of an APA if there are no material changes in the Business operations and facts relating to the Controlled Transactions and the critical assumptions remain valid. APA renewal request will need to be filed at least 3 months before the expiry of the existing APA.

Stage 1
Pre- filing consultation

• Pre-filing request to be made to FTA in prescribed form
• Pre-filing meetings assess the possibility of entering into an APA
• One or more pre-filing meetings will be scheduled by FTA

Prefiling consultation to be completed within 6-9 months from request. Notification of outcome by FTA within 60 days of consultation meeting

Stage 2
APA application filing

• APA application to be filed in the prescribed form
• FTA and taxpayer shall agree a project plan outlining timelines for each stage of the APA process
• Review of APA application including request for additional information, conducting site visit and interviews*

File application within earlier of 2 months (other reference of 40 days )from the date of pre-filing approval, or 12 months prior to commencement of the first Tax Period to be covered

Stage 3
Evaluation & Negotiation

• FTA prepares a TP analysis addressing the manner and criteria for determination of ALP based on the information obtained
• Discussion of TP analysis
• If FTA and applicant are unable to reach mutually agreeable position, the application may be dropped.

Taxpayer’s feedback on FTA’s TP analysis to be provided within 30 Business Days from the date of receipt of such analysis

Stage 4
Conclusion & Implementation of APA

• Signing of APA agreement based on terms mutually agreed.
• Application may be withdrawn at any time before conclusion of the agreement.
• FTA shall not use any information and documents gathered during the APA process for audit purposes#

Conclusion of APA within best practice timelines prescribed by the OECD (i.e. within 24-30 months)

*All information requested by FTA should be submitted within 40 business days of request.

# In many jurisdictions, separate teams manage APA programmes and audit procedures. In this case, however, the FTA oversees both. A firewall provision has been established to ensure that APA-related information is not used for audit purposes.

UAPAs for cross border Controlled Transactions shall be exchanged with foreign tax administrations of the jurisdiction of ultimate parent entity, immediate parent entity and counterparty of Controlled Transactions in accordance with BEPS Action 5.

APA Monitoring & Review – Filing of Annual Declaration

Upon entering into an APA, a person is required to file an APA Annual Declaration for each tax period covered under the APA in the prescribed form. The declaration is to be filed within 90 business days

from the date of signing the APA or by the due date of filing each relevant tax return, whichever is later.

Reasons for Rejection of prefiling request / APA application

A pre-filing request / APA application may be rejected for the following reasons:

*Even if a pre-filing request is approved, an APA application can be rejected on the same conditions prescribed

Prescribed forms/ details

Appendix 1 of the guide: List of Potential Critical Assumptions

• Operational & Economic critical assumptions
• Legal critical assumptions
• Financials & Tax related critical assumptions
• Other assumptions

Appendix 2 of the guide: APA Pre-filing Form

Details of the person and business along with industry overview, tax period, particulars of controlled transaction, proposed critical assumptions etc.

Appendix 3 of the guide: APA Application Form

Details of the Person’s business, related parties, covered tax periods, controlled transactions, market and industry details, transfer pricing methodology for each controlled transaction, financial and operating information, historic transfer pricing background etc.

Appendix 4 of the guide: APA Annual Declaration Form

Declaration on complying with the terms and conditions of the APA

Way forward for taxpayers

Thorough planning and preparation are essential before submitting an APA application. Pre-filing consultations are mandatory, and APA applications can be filed only on approval of the pre-filing request, highlighting the importance of clear communication with the FTA from the outset. Pre-filing consultations take on particular importance, as they require taxpayers to address multiple aspects with the FTA and reduce the risk of rejection under the circumstances outlined in the guide.

Moreover, there is an emphasis on conduct and contract to be aligned as well as requirement for maintenance of comprehensive documentation supporting the APA applications including the assumptions made in forecasts.

Moving forward, taxpayers may consider the following steps:

• Confirm eligibility to apply for APA scheme for relevant Controlled Transactions
• Evaluate APA feasability considering nature, criticality & value of the related party transactions vis-à-vis time & cost involved in the process
• Determine strategy – transactions to be covered & optimum period to cover

APA feasibility study

• Evaluate existing TP Policies and align the same with commercial substance
• Maintain intercompany agreements reflecting the TP policy
• Align contract with actual conduct of parties

Streamlining of TP arrangements

• Determine whether threshold of AED 100 mn met* -after determining ALP of transactions
• Detailed functional and economic analysis to be conducted
• Preparation of pre-filing application based on agreed strategy

Preparation of APA application

*APA application can be accepted even where threshold < AED 100 mn, at FTA’s discretion

How VSTN can support

The APA programme represents a robust mechanism for dispute resolution, promoting tax certainty and unanimity in the approach relating to the controlled transactions. Taxpayers should assess the suitability of the APA option by weighing the nature, significance, and value of their transactions against the time and cost required for the process. Moreover, an APA requires a clear understanding of the underlying transaction economics, business context, and transfer pricing rationale to obtain a better outcome during negotiations with the FTA.

VSTN’s team brings extensive expertise in managing APA assignments, having successfully supported clients in concluding multiple APAs in other jurisdictions.

VSTN offers end-to-end support in APA process including:

• Feasibility Analysis considering the cost benefit analysis
• In-depth analysis of business and aligning the transfer pricing policy with the business model
• Providing strategic guidance in preparation and submission of pre-filing request
• Represent before FTA in pre-filing consultations
• Preparation and submission of APA applications and other information requested by FTA
• Negotiation with Tax Authorities and support during site interviews/meetings
• Post conclusion support – Filing of annual declaration and FTA review
• APA renewal support