Tax Academy Signature Conference 2021: Taxes and Investments in a Post-Pandemic World

Tax Academy held a successful virtual conference on Taxes and Investments in a Post Pandemic World on 3 September.

More than 350 participants took away a key message that Singapore will adjust its corporate tax system as needed, if and when a consensus is fully reached. We will abide by the internationally agreed standards, safeguard our taxing rights and seek to minimize the compliance burden for businesses.

Opening Address

In her opening address at the event, Minister Indranee Rajah shared about the Base Erosion and Profit Shifting (BEPS 2.0) Project, which involves a revision of international tax rules.

Opening Address by Guest-of-Honour, Minister in the Prime Minister’s Office, Second Minister for Finance and National Development, Ms Indranee Rajah.

“There is strong international momentum to achieve a global agreement on BEPS, including a minimum effective tax rate of at least 15%, by the end of this year. Post-BEPS 2.0, Singapore as a small economy will have to work harder than ever to attract and retain investment. But we are no strangers to hard work and meeting challenges. Together, we can strengthen or build new advantages, and seek new opportunities.” - Minister Indranee Rajah

You can read the speech here.

Panel Discussion

Notwithstanding the complexity of the OECD’s Pillar 1 and 2 proposals, and that more hammering of implementation details and consensus are expected, the speakers left in the minds of participants a few certainties on the changes:

• The principle of reallocation of profits to market jurisdictions
• A global minimum tax rate to limit the room for tax competition going forward
• More substance needed in economic activities

Questions were asked about the sustainability of the impending changes given that the OECD/Inclusive Framework on BEPS(IF) has been the outcome of political compromise and there remains many implementation issues. Then again, what would be the alternatives? Could further refinements be made to the proposals? Governments need tax revenues in the short term to pay for the costs of the pandemic and the current proliferation of unilateral measures is not ideal.

Therefore, the conference identified several critical success factors in the adoption and implementation of the tax changes:

• A level playing field, i.e. a critical mass of countries, if not all, adopting the changes
• Tax certainty on the new rules
• Multiple level of taxation of profits be minimized
• Practical and pragmatic administration and compliance

Businesses could prepare for these changes. Businesses would do well to augment their existing business and reporting structures for new tax reporting obligations and systems. Tax authorities could strengthen their tax certainty frameworks as businesses would want to invest heavily in these frameworks to secure tax certainty.

Beyond the short-term concerns of tax revenues and impending Pillar 1 and 2 changes, the sustainability of Taxes and Investments in a Post Pandemic World lie in the realization that the changes are at a whole new level of the eco-system. Technological and transformational changes in businesses and economy are needed. Competition will increasingly be based on fundamental advantages such as a reliable and skilled workforce, a sound legal system that enforces the rule of law, connectivity, openness to innovation, certainty and stability.

We, at the Tax Academy, thank all speakers, panelists, guests and participants for making this conference a success! We hope to see you at our next event.

Mr Pascal Saint-Amans shared on recent progress towards the renewed international tax cooperation during his segment on “Making the Global Taxation System Work”

Panel Discussion on “Fiscal Sustainability and Taxes in Post-Pandemic World”.

Panelists, (from top left to right) Ms Doreen Tan, Mr Rajat Bansal, Mr Giammarco Cottani, (from bottom left to right) Mr Chris Woo, Ms Chiam Yah Fang, Mr Harvey Koenig