Businesses play a crucial role in giving back to society and encouraging their employees to kickstart their journey to give back. Unfortunately, the difficult economic environment due to COVID-19 in 2020 resulted in less being given back to charities. <\/p>\n\n\n\n
According to the Corporate Giving Survey 2017, only 1 in 2 Singapore businesses give back. In 2020, then-Deputy Prime Minister and Minister for Finance Heng Swee Keat stressed that many charities and social services agencies saw even less being given back. Even when it comes to giving back, majority \u2013 89% \u2013 of Singapore businesses tend to do so via philanthropy, while only 39% of businesses gave back through volunteering.<\/p>\n\n\n\n
To encourage more corporate volunteerism, he initially announced that the Business and IPC Partnership Scheme (BIPS) will be extended for another two years, until the end of 2023<\/strong>, during his Budget 2021 speech. <\/p>\n\n\n\n In 2023, current Finance Minister Lawrence Wong extended the existing BIPS, which will be incorporated into a broader Corporate Volunteer Scheme <\/strong>for another three more years, to 31 December 2026<\/strong>. <\/p>\n\n\n\n Read Also: <\/em><\/strong>Singapore Budget 2021: 10 Things Business Owners Need To Know<\/em><\/strong><\/a><\/em><\/strong><\/p>\n\n\n\n Under the Business and IPC Partnership Scheme (BIPS)<\/strong><\/a>, businesses enjoy a 250% tax deduction<\/strong> on qualifying expenditure incurred from 1 July 2016 to 31 Dec 2023<\/strong> when they send employees to volunteer and provide services, including secondments, to Institutions of a Public Character (IPCs).<\/p>\n\n\n\n The existing BIPS will be renamed to Corporate Volunteer Scheme (CVS) and will come in effect from 1 January 2024. Furthermore, the scope of volunteering activities will also be extended to those that are conducted virtually (like online mentoring and tuition support for children) or outside of the IPCs’ premises (refurbishment of rental flats). <\/p>\n\n\n\n IPCs are essentially registered charities<\/strong> who are able to issue tax deduction receipts<\/strong> to donors. Companies who wish to partner and volunteer with IPCs will be able to choose a charity that aligns best with their company\u2019s core values and beliefs from an extensive list<\/a>.<\/p>\n\n\n\n Read Also: <\/em><\/strong>What Is The Difference Between a Charity and a Social Enterprise?<\/em><\/strong><\/a><\/em><\/strong><\/p>\n\n\n\n All businesses that carry a trade or run a business in Singapore are eligible for the Business and IPC Partnership Scheme (BIPS) or Corporate Volunteer Scheme (CVS) when they send employees to volunteer and provide services<\/strong> at IPCs. <\/p>\n\n\n\n Employees who are owners of businesses, for example, sole-proprietors, partners and shareholders who are also directors of the company are excluded from BIPS.<\/strong><\/p>\n\n\n\n Qualifying businesses<\/strong> include companies, sole proprietorships, partnerships (including limited partnerships and limited liability partnerships), registered business trusts and bodies of persons. <\/p>\n\n\n\n Read Also: <\/em><\/strong>11 Businesses That Were Mentioned by DPM Heng in Budget 2021 (And What They Do)<\/em><\/strong><\/a><\/em><\/strong><\/p>\n\n\n\n Do note that a single Corporate Social Responsibility initiative may benefit from BIPS or the matching grant under the Share as One programme<\/a>, but not both.<\/p>\n\n\n\n Qualifying expenditure refers to an amount of money spent that can be claimed under a certain scheme.<\/p>\n\n\n\n For BIPS, qualifying expenditure includes the basic wages<\/strong> of employees and other related expenses <\/strong>incurred by the business that were necessary for the provision of services<\/strong> to the IPC. <\/p>\n\n\n\n All qualifying expenditure must meet the following requirements:<\/p>\n\n\n\n Here\u2019s a scenario to better illustrate \u201cqualifying expenditure\u201d. <\/p>\n\n\n\n Company X is a florist. They partnered and volunteered at Alzheimer\u2019s Disease Association for a day. Employees of company X took a shutter bus to and from the charity. At the charity, employees held a flower arranging class. <\/em><\/p>\n\n\n\n Company X\u2019s qualifying expenditure will include their employees\u2019 wages for that day, transport fees and the amount they spent to organise the flower arrangement class (that includes the cost of flowers, wrapping paper, etc).<\/p>\n\n\n\n The time that employees of company X spends travelling to and from the charity will not qualify for BIPS. Generally, if the time spent volunteering falls outside of an employee\u2019s working hours, it will not qualify for BIPS. However, if companies provide their employees time off in lieu, it can qualify for BIPS.<\/p>\n\n\n\n BIPS was enhanced on 2 Dec 2019 for easier claiming of tax deductions. Businesses are now allowed:<\/p>\n\n\n\n Skill-based volunteering refers to services that require working professionals to apply work-related expertise, as required by the IPC.<\/p>\n\n\n\n An example of skill-based volunteering would be employees from a tech company teaching kids that are housed at a children\u2019s charity how to code.<\/p>\n\n\n\n Subject to receiving IPC’s agreement, businesses may claim 250% tax deduction<\/strong> in total on the qualifying expenditure incurred. <\/p>\n\n\n\n Businesses should take note that the qualifying expenditure is subjected to a<\/strong> cap of $250,000 per business per Year of Assessment (YA)<\/strong>. A qualifying expenditure cap of $50,000 is also imposed on each IPC per calendar year<\/strong>.<\/p>\n\n\n\n[Update<\/strong>]: As announced in Budget 2023, the qualifying expenditure cap of $50,000 for each IPC per calendar year will be increased to $100,000 <\/strong>from 1 January 2024. <\/p>\n\n\n\n Below is a step-by-step guide to how businesses can make their BIPS\/CVS claim:<\/p>\n\n\n\n Step 1:<\/strong> Come to a mutual agreement<\/strong> with the IPC on the type and duration of volunteer services, as well as the estimated expenditure, before your businesses provides the service.<\/p>\n\n\n\n Step 2:<\/strong> Download and complete the BIPS Service Giving Form A and Declaration<\/strong><\/a> for the IPC\u2019s endorsement.<\/p>\n\n\n\n Step 3:<\/strong> Seek the IPC\u2019s endorsement on the completed BIPS Service Giving Form B<\/strong><\/a> with the actual expenditure after the completion of your business\u2019 volunteering service.<\/p>\n\n\n\nWhat Is The Business and IPC Partnership Scheme (BIPS)?<\/strong><\/h3>\n\n\n\n
Who Qualifies for The Business and IPC Partnership Scheme (BIPS)?<\/strong><\/h3>\n\n\n\n
What Are The Qualifying Expenditure And Cap?<\/strong><\/h3>\n\n\n\n
How Can Businesses Make BIPS Claims?<\/strong><\/h3>\n\n\n\n