Brief Introduction

The tax deduction scheme was implemented from 1 Jan 2005.However, in the past, only twice of the amount donated is able to be deducted from the donors' income tax.However , it was later announced that all donations which previously qualify for double tax deduction would temporarily qualify for 2.5 times tax deduction now.

In order to qualify for tax deduction, one must :

1)Donate to name Institutions of a public character(IPC) . It can also be a donation to an IPC facilities, events or programmes .

** IN ORDER TO CHECK IF AN ORGANISATION IS AN IPC, PLEASE CHECK THE LINKS BELOW**

https://www.charities.gov.sg/charity/index.do

2)Making donations to any name facilities of approved beneficiaries.

ONE KEY THING TO NOTE:

If the donations are made for a "foreign charitable purpose", they do not qualify for tax deduction even though they are made to an approved Institution of a Public Character (IPC). 

Information from Inland Revenue Authority Of Singapore.(http://www.iras.gov.sg)

GOOD NEWS TO ALL!

GOOD NEWS TO ALL! 

Originally, the tax deduction scheme would come to an end on 31 December  2011. However, in order to encourage more people to donate as the economy picks up, the Minister for Finance announced  that  tax deduction of 2.5 times will be extended for another 5 years. This means tax deduction of 2.5 times would be available till 31 December 2015!

         SO WHAT ARE YOU WAITING FOR?

      JOIN US IN HELPING THE SOCIETY BY                                                          

                                DONATING !


Information from Inland Revenue Authority Of Singapore.(http://www.iras.gov.sg)

What kind of donations are tax deductible?

Today's post is extremely important because it lists out the type of donations that is tax deductible. Do note that not all kinds of donations would entitles one to tax deduction. The type of donations that are tax deductible are:

1) Cash donations

Cash donations to any Institution of a Public Character (IPC) or the Singapore Government that benefit the local community who entitle one to have tax deduction.Only donations which does not have any material benefit to the donor are tax-deductible.Donations with benefits that have no commercial value will be treated as pure donations. 

2) Shares donations

Shares that are listed on the Singapore Excahnge(SGX) /units in unit trusts that can be traded to approved IPCs are tax deductible.The value of the shares will be determined based on the price of similar type of shares or units in the open market on the date of the donation.

This only applies to individual owners.

3)Computer donations

Donating of computers (including computer hardware, software, accessories and peripherals such as monitors, printers, and scanners) to prescribed educational institutions in Singapore are tax-deductible.

One would need to get approval from the Infocomm Development Authority of Singapore(IDA) regarding to the types of hardware and/or software that can be donated .Donors would be required to apply to IDA via info@ida.gov.sg to determine the value of the donated equipment.

4) Artefact Donations

Artefact donations to museums which have obtained the approved museum status by the National Heritage Board would qualify for tax deduction.Most importantly, the artefact needs to be a worthy collection item. In order to determine the value of the donated artefact, donors should apply to the Museum.

5) Public Art Tax Incentive Scheme 

If one donate sculptures or work of art for public display to the National Heritage Board(NHB) or any approved recipients,they would qualify for tax deduction.To determine the value, donors should apply to the NHB to determine the value of the donated public art.

6) Land and Building Donation

Donation of land and building to approved IPCs are tax deductible.Donors /approved IPC will have to get a market value appraisal of the donated property by a licensed property valuer.The amount of donation is based on the market value of the property given by IRAS. 

Information from Inland Revenue Authority Of Singapore.(http://www.iras.gov.sg)

What to do?

What to do ? what to do? what to do?


step 1: Donors would need to provide their full name ( according to IC) and tax reference numbers when making a donation to the IPCs.


Step 2: Donation form complete


step 3: IPCs will provide IRAS(Inland Revenue Authority Of Singapore) the necessary information in order to receive a tax deduction for the donation made.

                                                                               TADA!

YOUR DONATION WILL AUTOMATICALLY BE INCLUDED IN YOUR TAX                          ASSESSMENT!

      DONORS WOULD BE REWARDED !

WHEN WHEN WHEN WHEN WILL I RECEIVE MY TAX DEDUCTION?


* Tax deduction is given for donations made in the previous year.



EXAMPLE:
Donation made in year 2011.
Tax deduction will be given in the tax assessment for year 2012.




SPECIAL CASE!
If the tax deduction amount is more than the income earned that year, donors is able to carry forward the deductions that are not utilized for a MAXIMUM OF 5 YEARS.


EXAMPLE:
Donation made in 2011 would be allowed to carried forward up to 2016.


Information from Inland Revenue Authority Of Singapore.(http://www.iras.gov.sg)

Is this regard as a pure donation?

Like I have mention in my previous post, only certain type of donations are regard as pure donation. However, there are certain donations which comes with benefits. IRAS have reviewed the tax treatment of donations which comes with some benefits and hence some of the donations made to institutions of a public character (IPCs) will  be deemed to be pure donations even though there are some benefits given in return for the donations.


The following examples are the most common cases in Singapore:






1)Types of benefits: donation includes ticket to attend charity dinner


Is it regard as having commercial value: NO
Income Tax Treatment : Tax deduction on full amount donated


2)Types of benefits: Charity auction
 Is it regard as having commercial value:YES
 Income Tax Treatment : Tax deduction on the difference between the donation and the market value of the
auction item.


3)Types o:f benefits :Lucky draws
   Is it regard as having commercial value: YES
   Income Tax Treatment :No tax deduction.


4)Types o:f benefits :ticket to attend charity show
   Is it regard as having commercial value: NO
   Income Tax Treatment : Tax deduction on the full donation


5)Types o:f benefits :Sales of artefact
   Is it regard as having commercial value:YES
   Income Tax Treatment :  Tax deduction on the difference between the amount donation and the market value of the artefact.




Information from Inland Revenue Authority Of Singapore.(http://www.iras.gov.sg)