A worked group case dated 2 October 2025
Part 2 of IRAS’s workshop uses a Singapore-headquartered group to work through four questions: where IIR and QDMTT exposure arises, the UPE’s Singapore MTT, Singapore DTT and allocation under section 45. Its consolidated revenue exceeds EUR 750 million in all four preceding years. The calculations concern the year ending 31 December 2025 and use Singapore dollars. They are illustrative facts and rounded solutions, not a tax assessment for an actual group.
Group structure and geographic assumptions
The Singapore UPE owns 70% of B Co in jurisdictionB and 70% directly in C1 Co; B Co owns 20% of C1 Co, with 10% held outside the group. The UPE owns all C2 Co and 90% of C3 Co in jurisdictionC. It owns 90% of W Hold Co, which wholly owns X Op Co;40% of Y Hold Co, which owns 60% of Z Op Co;50% of JV Hold Co, which owns 90% and 70% of its two operating subsidiaries;90% of IE Co; and all A Co in jurisdictionA, which owns 90% of LP. Singapore, A and B implement qualified IIR and QDMTT in 2025; C implements neither, and the case assumes no UTPR.
Consolidation and exclusions
All named ordinary subsidiaries, the holding and operating companies, IE Co and LP are consolidated line by line. JV Hold Co uses the equity method in the UPE’s statements and consolidates its own two subsidiaries. Its own revenue below EUR 750 million does not remove the connected JV group from the case. There are no excluded entities. IE Co is an investment fund but is not the UPE, so its fund identity does not make it an excluded UPE fund. Y Hold Co is a CE despite 40% ownership because it is consolidated.
POPE, minority ownership and joint ventures
B Co is a POPE because it owns another CE and 30% of its profit ownership is external. Z Op Co is a minority-owned CE because the UPE’s indirect ownership is 24%, calculated as 40% times 60%, within the 30% threshold. JV Hold Co meets the equity-method and at-least 50% ownership test; its consolidated subsidiaries follow the JV-group treatment. These categories require their own rules and must not all be blended into the ordinary Singapore CE pool.
LP, its PE and location rules
LP is transparent in Singapore but not in jurisdictionA, is not tax resident anywhere and has a Singapore treaty PE. It is a flow-through entity and reverse hybrid for the relevant owner, falling within section 29(b); its own location is stateless while the PE is Singapore-located. The location analysis uses tax residence for ordinary entities, the special flow-through rules and treaty or net-basis tests for PEs, with tie-breakers where necessary. The MTT responsible members in the case are the UPE and B Co.
Exposure and the IIR offset
Ordinary Singapore CEs, Z Op Co, the JV group and the stateless Singapore-formed LP have the stated DTT exposure; IE Co’s DTT amount is treated as nil. A Co and B Co have domestic QDMTT exposure even though their assumed ETR exceeds 15%; registration and nil filing can remain. C1–C3 have jurisdictionB IIR and Singapore MTT exposure. B Co’s POPE status requires its allocable IIR share, while the UPE still applies IIR with an offset for the amount charged through that intermediate ownership.
JurisdictionC income and ETR
C1 Co has GloBE income 5,000 and covered taxes 500; C2 Co has a loss 1,000 and negative taxes 100; C3 Co has income 4,000 and taxes 400. Blending gives income 8,000 and taxes 800, so ETR is 10%. The loss participates in jurisdictional ETR, although a loss entity does not receive allocation of the jurisdictional top-up amount.
JurisdictionC SBIE and top-up
Eligible tangible assets total 6,500 and payroll 5,270. Using the case’s 2025 transitional rates of 7.6% and 9.6%, the rounded exclusions are 494 and 506, giving SBIE 1,000. Excess profits are 8,000 minus 1,000, or 7,000. The tax gap is 5%; add the assumed additional current top-up 550 and no QDMTT:5% times 7,000 plus 550 equals 900. The additional amount is included even though it is not generated by the current-year simple ETR multiplication.
Allocation and Singapore MTT 710
Allocate 900 using positive incomes only: C1 receives 900 times 5,000/9,000, or 500; C3 receives 400; C2 receives nil. The UPE inclusion ratios are 84% for C1 and 90% for C3, giving 420 and 360. The 14% indirect C1 ownership through B Co produces an offset 70, calculated as 500 times 14%. Singapore MTT is therefore 420 plus 360 minus 70, or 710. The denominator 9,000 used for allocation differs from 8,000 net income used for the ETR.
Allocating LP income before DTT
LP’s FANIL is 100,000. First exclude 10,000 attributable to the external 10% owner, then allocate 9,000 to its PE. The remaining 81,000 stays with LP because jurisdictionA does not treat the relevant ownership as fiscally transparent. That order distinguishes the PE amount blended with ordinary Singapore CEs from the stateless reverse-hybrid amount requiring a standalone calculation.
X Op Co’s starting figures and dividends
X Op Co starts with after-tax FANIL 200,000. Its P&L tax expense is 30,000 and own-income interest withholding tax 1,800 is recorded within pretax profit. Dividends total 11,000:5,000 from a 10% interest held six months and 6,000 from a 5% interest held 18 months. Both dividends are excluded because neither meets both short-term and portfolio conditions. Its 7,000 sale gain on a 5% holding remains included: the dividend’s one-year exception does not apply to the equity-sale portfolio rule.
X Op Co GloBE income 224,300
Add back 30,000 tax expense and 1,800 own-income withholding tax. Add the 3,000 PPE revaluation gain recognised in OCI that will not later pass through P&L. Accrued CPF 2,500 exceeds actual contribution 2,000, producing a positive 500 adjustment. Subtract excluded dividends 11,000. The calculation is 200,000 plus 30,000 plus 1,800 plus 3,000 plus 500 minus 11,000, or 224,300.
X Op Co adjusted covered taxes 30,430
Start with current tax expense 28,300, not the tax-return payable 18,000. Subtract 1,870 on excluded dividends and 1,500 uncertain tax accrued this year; add 1,000 previously accrued uncertain tax now paid and reverse the prior uncertain-tax credit 1,200. Add 1,800 own-income withholding tax. Withholding 800 borne for a payee is not tax on X’s income and is not included. Recast deferred tax 1,700 at 17% to 1,500 at 15%. These amounts yield 30,430.
Deferred liability and the recapture limit
The accrued deferred tax includes 500 on unremitted foreign income. The example does not treat it as a recapture-exception accrual and does not remove it immediately unless the unclaimed-accrual election applies. If it has not reversed by the end of 2030, the stated recapture adjustment is required. The accounting-to-tax computation therefore needs a tracked liability schedule, not a blanket assumption that all deferred tax is permanently eligible.
Ordinary Singapore pool and ETR
The ordinary pool comprises UPE income 54,000/tax 9,180, W Hold 15,000/750, X Op 224,300/30,430, Y Hold 18,000/2,250 and PE 9,000/1,530. Income totals 320,300 and taxes 44,140. ETR expressed to four decimal places is 13.7808%, giving a top-up percentage 1.2192%. Z Op, the JV group, IE and LP remain outside this ordinary pool.
Ordinary Singapore SBIE and tax 3,852
The pool has tangible assets 30,800 and payroll 20,800. At 7.6% and 9.6%, rounded carve-outs 2,341 and 1,997 give SBIE 4,338. Excess profit is 320,300 minus 4,338, or 315,962. Multiplying by 1.2192% and adding no additional current amount gives rounded DTT 3,852. These 2025 transitional carve-out rates differ from the eventual 5% rates.
Separate minority, JV, investment and stateless computations
Z Op income 150,000 and tax 7,500 give 5% ETR; SBIE 2,200 leaves 147,800 excess profit and 14,780 top-up. The JV group nets loss 10,000 against income 120,000 and 80,000, giving 190,000 income and 19,300 taxes, ETR 10.1579%; SBIE 4,696 gives 185,304 excess profit and 8,973 top-up. IE Co’s DTT is nil. Stateless LP’s 81,000 income and no taxes give 15% top-up, or 12,150. The separate computations are required even where the entities are physically associated with Singapore.
Total Singapore DTT 39,755
Sum ordinary-pool 3,852, minority-owned 14,780, JV 8,973, investment nil and stateless 12,150: total 39,755. DTT applies to 100% of the relevant top-up, irrespective of the UPE’s ownership percentage in the entities or connected JV group. This contrasts with the inclusion-ratio and intermediate-parent offset used for MTT. The PE remains blended with ordinary Singapore entities, while LP itself is standalone.
Conditions for the section 45 election
A group can elect for the portion attributable to a particular CE, JV or JV subsidiary to be paid by that entity. It cannot elect for an entity with negative GloBE income, a flow-through entity that is not a reverse hybrid for any relevant items, an entity with ETR at least 15%, or one that left the group or ceased JV connection before the return date. X Op, Z Op and JV Op 1 satisfy the case’s conditions. The election changes who pays the allocated amount, rather than reducing the computed DTT.
Allocation formulas and the final payer amounts
Ordinary CEs allocate the pool’s top-up by their income divided by total positive income of ordinary Singapore CEs. A standalone MOCE, qualifying section 29(b) reverse hybrid or standalone JV uses its own amount; a minority-owned subgroup or JV group uses that group’s positive-income pool. X Op pays 224,300/320,300 times 3,852, rounded 2,697. Z Op pays 14,780. JV Op 1 pays 120,000/200,000 times 8,973, rounded 5,384; the JV loss is excluded from the allocation denominator. The designated local DTT filing entity pays the remaining 16,894.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
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