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This section outlines donations that are tax deductible:
Cash donations made to an approved Institution of a Public Character (IPC) or the Singapore Government 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.
Only outright cash donations that have no material benefit to the donor or institution are tax-deductible. As a concession, however, 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. This is the case if:
This donation scheme applies to both corporate and individual donors.
Gifts of public shares listed on the Singapore Exchange (SGX) or of units in trusts traded 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 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.
Gifts of computers (including computer hardware, software, accessories and peripherals such as monitors, printers, and scanners) are tax-deductible donations provided:
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 equal to the current market value of the donated items will be taxed.
This donation scheme applies to corporate donors only.
Gifts to museums by individual or corporate donors are tax-deductible donations provided:
Donors should apply to the museum or NHB to assess the worth of the donated artefact.
Museums that are 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.
As 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.
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.
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.
The amount of donation is based on the market value of the property endorsed by IRAS. The cost of valuation is not tax deductible.
These donations are also tax deductible as of 1 Jan 2005:
These donations are not tax deductible:
The tax deduction on donation is deducted against your statutory income.
| Total Income/Statutory Income | -------» Less expenses & donations | Assessable income | -------» Less personal reliefs | Chargeable Income |
Donation of $12,000 to an approved IPC
If your total statutory income for YA 2016 is $120,000 (i.e. you earned $120,000 in 2015) and you donated $12,000 to an IPC in 2015, your assessable income would be calculated as follows:
| Total Statutory Income | $120,000 |
| Amount of Donation | $12,000 |
| Amount of Deductible Donations | $36,000 ($12,000 x 3) |
| Assessable Income for YA 2016 | = $84,000 ($120,000 - $36,000) |
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.
From 1 Jan 2011, all individuals and businesses are required to provide their identification number when making donations to the IPCs in order to be given tax deductions on the donations.
When donations are tax deductible, the donation receipts issued by approved IPCs will indicate the words "Tax-Deductible". It is important to keep these receipts for your records
The donation will be included automatically in your tax assessment provided:
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.
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.
