Tax deductions for donations to IPCs made simple from 1 Jan 2011
Come 1 January 2011, individuals and businesses that donate to an Institution of Public Character (IPC) will be required to provide identification number (eg NRIC number for an individual and the Unique Entity Number for a business) for their donations.
The IPC will then transmit the donors’ details to IRAS electronically, and tax deductions for the donations will be automatically reflected in their tax assessments based on the information from the IPC. The donors will not need to make a separate claim in their tax returns or send donation receipts to IRAS.
Currently, about 400,000 individuals provide their identification numbers to IPCs for their donations and are enjoying the convenience of having the tax deductions automatically reflected in their tax assessments. A small number of individuals, about 2000 of them, however, have to make a separate claim for tax deductions for their donations in their tax returns because they did not give their identification numbers to IPCs. IRAS on its part will need to verify their claims with the IPCs. Companies that provide their company’s identification number to IPCs for their donations will also have their tax deductions for the donations automatically reflected in their tax assessments based on the information from the IPC. They do not need to make a separate claim in their tax returns or send donation receipts to IRAS. Donors who wish to remain anonymous and do not wish to claim tax deduction are not required to provide their identification numbers to the IPCs.
The requirement for all donors to provide their identification numbers to IPCs come 1 January 2011 will benefit donors, IPCs and IRAS. Donors need not keep receipts and remember to claim tax deductions while IPCs and IRAS will be able to process donations and tax deduction more efficiently.
Members of the public can go to the Charity Portal at http://www.charities.gov.sg to find out if an organisation is an IPC.
For more information on donations and tax deductions, please visit IRAS’ website at www.iras.gov.sg Donors with tax queries may call 1800 356 8300 or email [email protected]
Inland Revenue Authority of Singapore