Remember in 2021 when we were told that the 'Pillar Two' global...
TaxWatch@taxwatch
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Nov 09, 2026
~2 min read
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Remember in 2021 when we were told that the 'Pillar Two' global minimum tax βput an end to the race to the bottom" on corporate tax?
We weren't so sure. π§΅
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We weren't so sure. π§΅
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Today's @FT reports @Apple Inc's 2025-26 results. For the first time it includes some country-specific tax reporting thanks to new US reporting rules. The stand-out is Singapore.
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Singapore's corporate tax rate is already low (17%) and often reduced further by exemptions.
Apple Inc books pre-tax profits of $40-50 bn in Singapore every year: equivalent to ~30% of its global accounting profits.
Apple Inc books pre-tax profits of $40-50 bn in Singapore every year: equivalent to ~30% of its global accounting profits.
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What's Apple doing in Singapore for that huge slice of the group's profits? The main Singapore subsidiary sells goods and (some) services. It has some IP but that generates little of its revenues. It holds very little inventory: $134.6m at year-end 2025, on $112 billion of sales.
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Over 80% of its sales are to other parts of the corporate group.
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As the FT reports: "Across its two main Singaporean entities, Apple generated about $9mn in pre-tax profit per employee in 2024, the latest year for which figures can be calculated....Across the world in 2025, the equivalent figure was less than $1mn."
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Under the Pillar Two system, this is all a plain vanilla, wholly legal tax outcome. It's the system working as designed.
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Singapore's corporate tax revenues are actually booming thanks to Pillar 2. It recouped $2.6bn in 2026 just from taking Apple's tax rate back up to 15%. Bermuda, Ireland, Jersey have all seen vast corporate tax windfalls from Pillar Two this year
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During the Pillar 2 negotiations, threatened vetoes from Ireland and other tax havens brought the rate down to 15% (from 21%). These same havens are now reaping revenues from undercutting other countries within the Pillar 2 system: the 'race to the bottom' in action.
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As TaxWatch's Mike Lewis told the FT: with Pillar 2 setting a very low floor, "itβs business as usual for some of these companiesβ.
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Meanwhile the 'Side by Side' deal, driven by the UK and G7, will soon exempt US-headed companies like Apple from 2 of the 3 Pillar 2 taxes: giving away Β£740m of UK tax annually to the biggest US multinationals, at the expense of both UK firms' competitiveness and the public purse
