Tax Deduction for Charitable giving in Singapore

Tax Deduction of 2.5 Times the Amount of Donation made from 2009 to 2015

To encourage charitable giving in Singapore, the Minister for Finance announced that  tax deduction of 2.5 times will be extended to donations made to 31 December 2015.

1.  Donations to named Institutions of a Public Character (IPC), IPC facilities, events or programmes are tax deductible.
The charitable organisation has to issue a tax deductible receipt then the donation will be claimable. 
Eg. 
If you donate S$3,000 in cash, you can deduct 2.5 times x S$3,000 = S$7,500 against your company’s chargeable income. 

2.  Donations to named facilities of approved beneficiaries (including artefacts and public sculptures) under any of the other approved donation programmes.

3.  Donations under any of the approved donation programmes where the IPC or approved beneficiary acknowledges the donation by including the donor's name or logo in the IPC's collaterals (e.g. banners, publications, advertisements).

4.  The tax deduction will not be given in cases where the donor is essentially advertising at the IPC facility, event, or programme. 
Eg
The donor should not be allowed to display its own banners, products, or other collaterals at the IPC facility, event, or programme that it donated to. The "donation" in that case may instead be regarded as an advertising or marketing expense for tax purposes.

5.  If the donations or gifts are for a "foreign charitable purpose", they are not tax deductible even though they are made to an approved Institution of a Public Character (IPC). For example, donations made to some overseas relief funds managed by an approved IPC are not tax deductible.

6.  All other conditions for tax deduction remain unchanged, e.g. the carry-forward of unutilised donations up to a maximum of five years, order of offset rules (i.e. to allow deduction on the unutilised donations on the basis that donations made on an earlier date shall be allowed first), as well as imposing the shareholding test on corporate donors before any unutilised donations can be allowed tax deduction.

7.  In order to obtain the tax deduction, the charity that you or your company making donations to, must hold a valid IPC status.  You may wish to confirm with the charity in advance, so that you know if you would be receiving the tax deduction against your personal or your company’s income.

8.  For more information, please visit  https://www.charities.gov.sg
To search if an organization has a valid IPC status, please go to the top right hand corner of the Charity Portal.

Filed Under: Business in Singapore

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