Global Tax in Asia

International tax frameworks continue to influence fiscal policies across Asia. As part of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), many Asian jurisdictions are adjusting their tax systems to address cross-border tax challenges, enhance transparency, and respond to shifts in the global tax environment.

At the core of the reform is the OECD’s Two-Pillar Solution. Pillar One reallocates some taxing rights to market jurisdictions, especially for large multinational enterprises (MNEs) operating in digital and consumer-facing sectors. Pillar Two introduces a 15 per cent global minimum effective tax rate for MNEs with annual revenues above €750 million. Many Asian jurisdictions have endorsed these measures and are at various stages of implementation.

China has adopted several BEPS actions, including anti-avoidance rules and transfer pricing documentation. With a standard corporate tax rate of 25 per cent, it has introduced incentives for foreign investors who reinvest profits domestically. Preparations for Pillar Two are ongoing.

Japan has enacted legislation to implement the global minimum tax from 2024. With a combined corporate tax rate near 30 per cent, Japan has also incorporated extensive BEPS-related rules and reporting requirements.

South Korea maintains a progressive CIT structure ranging from 10 per cent to 24 per cent and has passed laws to implement Pillar Two by 2025. It has also updated digital taxation policies and continues to strengthen transfer pricing enforcement.

India has a 35 per cent corporate tax rate. Pillar Two implementation is under discussion.

Singapore, with a 17 per cent corporate tax rate and a territorial system, plans to introduce a domestic top-up tax from 2025 to comply with Pillar Two. Tax incentives are under review to meet global standards.

Malaysia applies a corporate tax rate of 24 per cent, recently reduced from 25 per cent, and is modernizing its transfer pricing and anti-avoidance rules. Malaysia supports the global tax framework and is preparing to implement Pillar Two measures.

Indonesia, with a standard corporate tax rate of 22 per cent, has strengthened its tax administration and introduced transfer pricing documentation requirements aligned with BEPS. Indonesia is consulting on the implementation of global minimum tax rules.

Thailand applies a 20 per cent corporate tax rate and has enhanced transfer pricing rules and thin capitalization guidelines. The country is monitoring developments related to Pillar One and Two and aims to update domestic laws accordingly.

The Philippines maintains a 25 per cent corporate tax rate and has begun adopting BEPS measures, including CFC rules and transfer pricing. It is exploring the implications of global tax reforms on its fiscal policies.

Vietnam, with a 20 per cent corporate tax rate, has taken steps to align with global tax standards by enhancing transfer pricing rules and implementing Country-by-Country (CbC) reporting for large multinationals. The government is reviewing Pillar Two requirements and considering the introduction of a domestic top-up tax to meet global minimum tax standards.

Other ASEAN members, including Cambodia and Laos, are gradually strengthening tax administration and compliance frameworks, with technical assistance from international organizations.

Overall, Asian countries are moving toward greater alignment with international tax norms. While timelines and policy choices vary, the region is experiencing a clear shift toward enhanced transparency, minimum tax standards, and updated rules for cross-border activity. These changes reflect both global pressures and domestic policy objectives as countries navigate an evolving international tax environment.