Donations and Tax Deductions

You may find out more about the different types of donations and their respective tax deductibility. There is also information on how to claim tax deductions.

Tax Deductible Donations

These donations are tax deductible:

Cash donations made to an approved Institution of a Public Character (IPC) or the Singapore Government for causes that benefit the local community are deductible donations.

Not all registered charities are approved IPCs. Donations made to a charity without approved IPC status are not tax-deductible.
You can search if an organisation is an approved IPC at the Charity Portal.

Cash Donations with Benefits

Only outright cash 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 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 having no commercial value if:

  1. the benefit is given in acknowledgement of the donation;
  2. the benefit has no resale value.

For details on the concessionary tax treatment and a list of common benefits given in return for donations and their tax treatment, please refer to the IRAS e-Tax Guide "Tax Treatment on Donations with Benefits"  (203KB).

This donation scheme applies to both corporate and individual donors.

Gifts of public shares listed on the Singapore Exchange (SGX) or of units in unit trusts traded in Singapore to approved IPCs are tax deductible.

Value of the Shares

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.

Date of Donation

The date of donation is the date on which the 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 .

As announced in Budget 2017, tax deduction scheme for donation of computers will be withdrawn with effect from 21 Feb 2017. A company that donates computers to prescribed educational, research or other institution in Singapore and institutions of a public character (IPC) on or after 21 Feb 2017 would not be eligible for any tax deduction.

Companies that donated computers (including computer hardware, software, accessories and peripherals such as monitors, printers, and scanners) before 21 Feb 2017 would continue to enjoy the 250% tax deduction, subject to the following conditions: 

  1. The donation is made to prescribed educational, research or other institutions and all IPCs; and
  2. The types of hardware and/or software donated are approved by the Infocomm Media Development Authority (IMDA). Donors should apply to IMDA via info@imda.gov.sg to assess the worth of the donated equipment.

Capital Allowance on Donated Hardware/Software

When a company incurs capital expenditure on computers bought solely for donation purpose, the company cannot claim capital allowance for this purchase. 

A company may have incurred capital expenditure on computers bought for the purpose of its own trade and fully claimed capital allowance on the computers (i.e. written down value is zero). However, it subsequently does not use them and donates them to one or more IPCs, a balancing charge (BC) equal to the open market value of the donated items (as assessed by IMDA) will be taxed.

This donation scheme applies to corporate donors only .

Gifts to museums by individual or corporate donors are tax deductible donations provided:

  1. The museum has obtained the Approved Museum Status with the National Heritage Board (NHB) ; and
  2. The artefact has to be deemed worthy of collection by NHB.

Value of Donation

Donors should apply to the museum or NHB to assess the worth of the donated artefact. 

Approved Museum Status

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 institutions established to acquire artefacts and making them accessible to the public.

This donation scheme applies to both corporate and individual donors .

From 1 Apr 2006, companies or individuals who donate sculptures or works of art for public display to the National Heritage Board (NHB)  or any of its approved recipients will qualify for tax deduction.

Qualifying Donations under PATIS include:

  1. donation of money or services given towards the installation or maintenance of the sculptures or work of art for public display;
  2. donation of a sculpture to an approved recipient for indoor public display; and
  3. public art works which are two or three dimensional with artistic and or heritage merits as desired by NHB.

Value of Donation

Donors need to apply to NHB to assess the value of the donated sculpture or work of art. 

This scheme is administered by NHB and applies to both corporate and individual donors .

From 1 Apr 2003, gifts of land or buildings to approved IPCs are tax deductible donations. 

Market Value Appraisal

Donors or the approved IPC need to arrange a market value appraisal of the donated property with a property valuer. The IPC should apply to IRAS  for an endorsement of the market value of the donated property. 

Value of Donation

The amount of donation is based on the market value of the property endorsed by IRAS. The cost of valuation is not tax deductible.

Date of Donation

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 .

Donations Effective 1 Jan 2005

These donations are also tax deductible as of 1 Jan 2005:

  1. Donations to name IPCs, IPC facilities, events or programmes;
  2. Donations to name facilities of approved beneficiaries (including artefacts and public sculptures) under any of the other approved donation programmes; and
  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).

Non-Tax Deductible Donations

These donations are not tax deductible:

  1. Donations where the donor is essentially advertising at the IPC facility, event, or programme. Donors displaying their banners, products, or other collaterals at the IPC facility, event, or programme to which it has donated is regarded as advertising or marketing expenses and not a donation; and
  2. Donations or gifts that are for a "foreign charitable purpose" (e.g. donations made to some overseas relief funds managed by an approved IPC).

Amount of Tax Deduction

1 January 2015 to 31 December 2015

In conjunction with SG50, the Government has decided to increase the tax deduction for qualifying donations from 250% to 300% of the amount of donation made in 2015. The 300% deduction for donations made from 1 January 2015 to 31 December 2015 (both dates inclusive) will be allowed to all existing qualifying donors (i.e. individuals, companies, trusts, bodies of persons, Hindu joint family).

1 January 2016 to 31 December 2018

To continue building a stronger sense of community, the Government has also decided to extend the 250% tax deduction for qualifying donations for another three years, i.e. from 1 January 2016 to 31 December 2018.

Summary of the Deductibility of Approved Donations

 

 Approved donations (including donations with naming opportunity) made during the period 1 Jan 2009 to 31 Dec 2014 Approved donations (including donations with naming opportunity) made during the period 1 Jan 2015 to 31 Dec 2015 Approved donations (including donations with naming opportunity) made during the period 1 Jan 2016 to 31 Dec 2018 
2.5 Times deduction                √                √
 3 Times deduction                √ 

 

The tax deduction on donation is deducted against your statutory income (which includes your employment, trade income, etc.) before arriving at your assessable income.

 

 

 

Total Income/Statutory Income  

 

 

 

-------»

Less expenses & donations

 

 

 

Assessable income  

 

 

-------»        

Less personal reliefs      

 

 

 

Chargeable Income

 

Example: Donation of $10,000 to an approved IPC

If your total statutory income for YA 2016 is $100,000 (i.e. you earned $100,000 in 2015) and you donated $10,000 to an IPC in 2015, your assessable income would be calculated as follows:

Total Statutory Income$100,000
Amount of Donation$10,000
Amount of Deductible Donations$30,000  ($10,000 x 3)
Assessable Income for YA 2016= $70,000 ($100,000 - $30,000)

Claiming Tax Deductible Donations

Tax deduction is given for donations made in the preceding year. For example, if an individual makes a donation in 2015, tax deduction will be allowed in his tax assessment for the Year of Assessment (YA) 2016.

You do not need to declare the donation amount in your income tax return. Tax deductions for qualifying donations will be automatically reflected in your tax assessments based on the information from the IPC (such as the donor's name, date and amount of donation on the tax deduction receipt). IRAS will no longer accept claims for tax deduction based on donation receipts. 

Requirement to Produce Identification to IPCs

From 1 Jan 2011, all individuals and businesses are required to provide their identification number (e.g. NRIC/FIN/UEN) when making donations to the IPCs in order to be given tax deductions on the donations.  

Donation Receipts

When donations are tax deductible, the donation receipts issued by approved IPCs will indicate the words "Tax-Deductible".

The donation will be included automatically in your tax assessment provided:

  1. Your employer is under the Auto-inclusion Scheme for Employment Income; and
  2. You have arranged for donations to be deducted from payroll.

If your employer is not under the Auto-inclusion Scheme for Employment Income, you may make the donation claim in your own income tax return.

The donation will be included automatically in your tax assessment provided: 

  1. You have arranged for the donations to be deducted from GIRO; and
  2. You have given your NRIC or FIN No. to the IPC at the point of donation.

All companies or bodies of persons have to provide their names and tax reference number to the IPCs if they wish to claim tax deductions on their donations.

Donors who wish to remain anonymous and do not wish to claim tax deduction are not required to provide their tax reference numbers to the IPCs. However, if donors subsequently wish to claim tax deduction, they should provide their tax reference numbers to the IPCs. The IPCs would then resubmit the information to IRAS.

 

Carrying 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 five years.

For example, a donation made in 2015 and allowed tax deduction in YA 2016, will be allowed to be carried forward (if tax deduction for donation exceeds the income for 2015) up to YA 2021.

Donors (companies) must satisfy the shareholding test if they want to deduct the unutilised tax deduction for donations against future income (similar to that imposed for claim of carry forward of trade losses and unutilised capital allowances). Unutilised donations will rank for deduction after trade losses and capital allowances.

Remission from Stamp Duties and Exemptions from Estate Duties

All donations of immoveable properties and shares to approved IPCs made on or after 1 Mar 2003 will be remitted from stamp 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.

  • What must I do when making a donation?

    All individuals and businesses should furnish their name and tax reference numbers (e.g. NRIC/FIN/UEN) to the approved IPCs when making a donation. The IPCs will then provide your donation details to IRAS so that a tax deduction for your donation will be automatically included in your tax assessment.

  • I have made a donation to an IPC and this entitles me to a lucky draw. Can I get a deduction for my donation?

    No. This is not an outright cash donation as you are entitled to some form of benefit, i.e. a chance to win prizes.

  • I donated $200 to an IPC in 2015. In acknowledgement of my donation, I was given a ticket to attend a charity dinner organised by the IPC. The cost of the actual dinner (i.e. food and entertainment) is $50. Can I claim a deduction for the donation of $200?

    As the benefit that comes from attending a charity dinner is treated as having no commercial value (i.e. resale value), 300% tax deduction on the full amount of $200 (i.e. $600) will be granted to you for the Year of Assessment 2016.

  • My company donated $20,000 to an IPC for their charity event. In return for doing this, we are given advertising space at their event. Can we claim a deduction for the donation?

    As the benefit that comes from the advertising space is treated as having a commercial value, tax deduction on the difference between the amount donated and the price of the advertising space is allowed to the donor.

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