How do I know which donations are tax-deductible
The following types of donations would qualify you for a double tax deduction (twice the donation value):
With effect from 1 Jan 2005, double tax deduction (twice the donation value) will be allowed for:
- donations to name Institutions of a Public Character (IPC), IPC facilities, events or programmes,
(Note: You can search if an organisation is an IPC at the top right hand corner of the Charity Portal.)
- donations to name facilities of approved beneficiaries (including artefacts and public sculptures) under any of the other approved donation programmes,
- 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).
Double tax deduction will not be given in cases where the donor is essentially advertising at the IPC facility, event, or programme. For example, 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.
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).
Enhancement of Tax Deduction on Donations for YA 2010
As announced in Budget 2009, the tax deduction on donations will be temporarily enhanced for Year of Assessment (YA) 2010.
This measure is to encourage greater charitable acts in Singapore during the downturn. The enhancement is for all donations that presently qualify for double tax deductions, made in the calendar year 2009 (i.e. 1 January 2009 to 31 December 2009) to qualify for 2.5 times tax deduction.
All other conditions regarding the tax deduction of donation 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.
Cash Donations
Cash donations to any approved Institution of a Public Character (IPC) or the Singapore Government that benefit the local community is tax-deductible.
Not all registered charities are approved IPCs. Donations made to a charity without approved IPC status is NOT income tax-deductible.
Only outright donations that do not give material benefit to the donor are tax-deductible. However, as a concession, certain donations made to IPCs on or after 1 May 2006 will be deemed as pure donations although there is a benefit given in return for the donation. To qualify for the concessionary tax treatment, donations with benefits given in return will be treated as pure donations if the benefits are treated as having no commercial value. Benefits are treated as no commercial value if:
- the benefit is given in acknowledgement of the donation; and
- the benefit has no resale value.
For details on this concessionary tax treatment and a list of common benefits given in return for donations and their tax treatment, please refer to the IRAS Circular "Tax Treatment on Donations with Benefits" (78KB) published on 1 May 2006.
This donation scheme applies to both corporate and individual donors.
Shares Donations
Gifts of shares listed on the Singapore Exchange (SGX) or of units in unit trusts that are ready to trade in Singapore, to approved IPCs are tax-deductible.
The approved IPC will determine the value of the donated shares or units. The value of the shares will be based on the price of the same type of shares or units in the open market, at the last transaction of such shares or units on the date of donation.
The date of donation is the date on which legal title is transferred to the approved IPC. Donation of options and shares with restriction on holding periods are not allowed under this donation scheme.
This donation scheme applies to individual donors only.
Computer Donations
Gifts of computers (including computer hardware, software, accessories and peripherals such as monitors, printers, and scanners) to prescribed educational, research or other institutions and all IPCs in Singapore are tax-deductible.
Donations of new computer hardware and software, computer accessories, and peripherals and handheld computers, which are of benefit to the recipient, would generally qualify for tax deduction. The types of hardware and/or software donated have to be approved by the Infocomm Development Authority of Singapore (IDA). Donors should apply to IDA via info@ida.gov.sg to assess the worth of the donated equipment.
This donation scheme applies to corporate donors only.
Artefact Donations
Gifts to museums which have obtained the Approved Museum Status with the National Heritage Board (NHB) are tax-deductible. The artefact has to be deemed a worthy collection item and supported by the National Heritage Board (NHB).
Donors should apply to the Museum or NHB to assess the worth of the donated artefact. Museums owned by public organisations can apply to the NHB for the Approved Museum Status.
Starting 1 Apr 2006, the Approved Museum Status may be given to non-profit collecting institutions established to acquire any collection of artefacts and making them accessible to the public.
This donation scheme applies to both corporate and individual donors.
Public Art Tax Incentive Scheme (PATIS)
If you donate sculptures or work of art for public display to the
National Heritage Board (NHB) or any of its approved recipients from 1 Apr 2006, you will qualify for double tax deduction. Donors must apply to NHB to assess the value of the donated sculptures or public art.
Qualifying donations under PATIS include the following:
- Public art works which are two or three dimensional with artistic and or heritage merits as desired by NHB. One example of the public art is the wall relief;
- Donation of a sculpture to an approved recipient, not being an approved museum, for public display indoors;
- Donation of money or services given towards the installation or maintenance of the sculptures or work of art for public display.
This scheme is administered by NHB and applies to both corporate and individual donors.
Land and Building Donations
Gifts of land or buildings to approved IPCs from 1 Apr 2003 are tax-deductible.
Donors or the approved IPC will have to arrange for a market value appraisal of the donated property by a property valuer. The IPC should apply to IRAS for an endorsement of the market value of the donated property.
The amount of donation is based on the market value of the property endorsed by IRAS. The cost of valuation is not tax-deductible. The date of donation, for the purposes of claiming the tax deduction, shall be the date on which the property is legally transferred to the approved IPC.
This donation scheme applies to both corporate and individual donors.
How do I claim tax deductions
Individual donors do not need to claim tax deductions for donations in their income tax form if they have given their NRIC No. or FIN No. to the approved IPC at the point of donation. The donation details will be provided to IRAS by the approved IPC and the donation deductions will be included automatically in the individual's tax assessment.
Donations made by individuals to IPCs via Payroll
- If you have arranged for the donations to be deducted from your payroll and your employer is under the Auto-inclusion Scheme for Employment Income, the donation will also be included automatically in your tax assessment.
- If your employer is not under the Auto-inclusion Scheme for Employment Income, you may make the donation claim in your own income tax form.
Donations made by individual to IPCs via GIRO
- If you have arranged for the donations to be deducted from GIRO and have given your NRIC or FIN No. to the IPC at the point of donation, the donation will be included automatically in your tax assessment.
Donations made by corporations and bodies of persons
All companies or bodies of persons have to make donation claims in their income tax forms.
When is tax deduction given
Tax deduction is given for donations made in the preceding year. For example, if an individual makes a donation in 2003, tax deduction will be allowed in his tax assessment for the Year of Assessment (YA) 2004.
Carry Forward of Unutilised Tax Deduction for Donations to IPCs
- When the tax deduction for the donation is more than the income for the year, the donor is allowed to carry forward the unutilised deductions for a maximum of 5 years. For example, a donation made in 2002, and allowed tax deduction in YA 2003, will be allowed to be carried forward (if tax deduction for the donation exceeds the income for 2002) up to YA 2008.
- Donors (companies) must satisfy the shareholding test (similar to that imposed for carry forward of trade losses and unutilised capital allowances). Unutilised donations will rank for deduction after trade losses and capital allowances.
This applies to all donations made on or after 1 Jan 2002.
Donations Receipts
When donations are tax deductible, the donation receipts issued by approved IPCs will indicate the words "Tax-Deductible".
Exemptions from Stamp Duties and Estate Duties
- Estate Duty
All donations by the estates to IPCs or the Singapore Government (whether or not specifically provided in the will), made on or after 1 Jan 2002 will be exempted from estate duty. Upon a written notification from the IPC, the Commissioner of Estate Duty will exclude the value of the donation made by the administrator of the estate when computing the estate duty liability of the estate. As soon as the estate duty assessment has been made, no further donations can be made from the estate.
- Stamp Duty
All donations of immovable properties and shares to approved IPCs, made on or after 1 Mar 2003 will be exempted from stamp duty.