{"id":9814,"date":"2024-12-19T08:00:00","date_gmt":"2024-12-19T00:00:00","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=9814"},"modified":"2024-12-19T17:18:36","modified_gmt":"2024-12-19T09:18:36","slug":"guide-to-claiming-tax-deductible-donations-for-businesses-in-singapore","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/guide-to-claiming-tax-deductible-donations-for-businesses-in-singapore\/","title":{"rendered":"Guide To Claiming Tax Deductible Donations For Businesses In Singapore"},"content":{"rendered":"\n

Singapore is highly regarded for its ease of doing business because of its stable and effective Corporate Income Tax system. While income from businesses is charged at a flat tax rate of 17%, the government also provides several incentives, such as tax rebates and tax exemption schemes.<\/p>\n\n\n\n

One such incentive that all businesses\u2014like individuals\u2014can claim is tax deductible donations. This form of tax incentive allows businesses to reduce their tax liability when they give back to society. These donations can also be part of the companies\u2019 ongoing corporate social responsibility efforts to make a positive impact on the community.<\/p>\n\n\n\n

Here\u2019s what you need to know about tax deductible donations and how you can claim them for your business.<\/p>\n\n\n\n

What Are Tax Deductible Donations?<\/strong><\/h3>\n\n\n\n

Donations of money or property to any approved Institution of a Public Character (IPC) are tax deductible. These contributions qualify for tax deductions, reducing your total taxable income.<\/p>\n\n\n\n

You can perform a search for the IPC’s registration on Charity Portal<\/a>.<\/p>\n\n\n\n

You should also receive a tax deductible receipt when you make a donation to a registered IPC. The receipt should contain information as follows:<\/p>\n\n\n\n

\"\"
Source: Charity Portal<\/a><\/figcaption><\/figure><\/div>\n\n\n\n

Read Also: Business and IPC Partnership Scheme (BIPS): How Companies Enjoy Tax Deductions While Volunteering with Charities<\/a><\/em><\/strong><\/p>\n\n\n\n

6 Types Of Tax Deductible Donations<\/strong><\/h3>\n\n\n\n

You can claim tax deductions for donations made in the following ways:<\/p>\n\n\n\n

#1 Cash Donations<\/strong><\/p>\n\n\n\n

Cash donations made to an approved IPC or the Singapore Government that benefit the local community are deductible donations.<\/p>\n\n\n\n

If you receive a benefit in exchange for your cash donations, you can only claim a tax deduction for the difference between the donation and the value of the benefit. <\/p>\n\n\n\n

#2 Shares Donations<\/strong><\/p>\n\n\n\n

This applies to individuals only; you can gift shares of companies that are publicly listed on the Singapore Exchange (SGX) or of units in unit trusts (UT) that are traded in Singapore to approved IPCs.<\/p>\n\n\n\n

The value of your share donations will be assessed based on the last price of the same type of shares or unit trusts in the open market on the date of donation.<\/p>\n\n\n\n

#3 Artefact Donations<\/strong><\/p>\n\n\n\n

Gifts of artefacts to museums that have Approved Museum Status with the National Heritage Board (NHB) would qualify as tax deductible donations. The donated artefact must be deemed worthy of collection by the NHB, which will also evaluate its value. <\/p>\n\n\n\n

#4 Donations Under The Public Art Tax Incentive Scheme (PATIS)<\/strong><\/p>\n\n\n\n

Another type of item, such as sculptures or works of art for public display donated to the NHB or any of its approved recipients, will qualify for a tax deduction. In the same way as with artefact donations, donors have to apply to NHB for an assessment of the value of the donated sculpture or work of art.<\/p>\n\n\n\n

#5 Land And Building Donations<\/strong><\/p>\n\n\n\n

Gifts of land and buildings to approved IPCs are also considered tax deductible donations. The market value of the donation, which would be determined by a property valuer, must be endorsed by IRAS.<\/p>\n\n\n\n

#6 Donations To Name IPCs<\/strong><\/p>\n\n\n\n

From January 1, 2005, donations to name IPCs, IPC facilities, events or programmes will be eligible for tax deductions. This includes donations to name facilities of approved beneficiaries under any of the other approved donation programmes and where the IPC or approved beneficiary acknowledges the donation by including the donor\u2019s name or logo in the IPC\u2019s collaterals.<\/p>\n\n\n\n

Donations That Aren\u2019t Tax Deductible<\/strong><\/h3>\n\n\n\n

You will not be able to claim tax deductions on donations where the donor is considered to be advertising at the IPC facility, event, or programme. Items such as banners, products, or other collateral displayed at the IPC facility, event, or programme are considered marketing expenses and not a donation.<\/p>\n\n\n\n

This includes making a cash donation to an IPC that entitles you to some form of benefit, like a lucky draw. However, if the benefit from the donation has no commercial value (i.e., resale value), you can claim a tax deduction on the donation amount. For example, if you\u2019re given a ticket to attend a charity dinner in acknowledgement of your donation, the cost of the dinner would be treated as having no commercial value. This would entitle you to claim the full donation amount.<\/p>\n\n\n\n

Additionally, donations or gifts that are for a “foreign charitable purpose” are also considered non-tax deductible.<\/p>\n\n\n\n

How Much Tax Deduction Can You Claim<\/strong><\/h3>\n\n\n\n

The tax deductions for qualifying donations will remain at 250% or 2.5 times till 31 December 202<\/strong>6. This means for every $1 of qualifying donations, you will receive an equivalent of $2.50 in tax deductions.<\/p>\n\n\n\n

For example, assuming your statutory income for YA 2024 is $100,000 and you donated $20,000 to an approved IPC in 2023, your assessable income would be:<\/p>\n\n\n\n

Total Statutory Income<\/strong><\/td>$100,000<\/td><\/tr>
Amount of donation<\/strong><\/td>$20,000<\/td><\/tr>
Amount of deductible donations<\/strong><\/td>$50,000 ($20,000 x 2.5)<\/td><\/tr>
Assessable Income for YA 2024<\/strong><\/td>$50,000<\/strong> ($100,000 – $50,000)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

How To Claim Tax Deductible Donations<\/strong><\/h3>\n\n\n\n

You can only claim tax deductions on qualifying donations made in the preceding year. These tax deductions will be automatically<\/strong> be reflected in your tax assessments based on the information provided by the IPC such as the donor\u2019s name, date and amount of donation on the tax deduction receipt.<\/p>\n\n\n\n

If you tax deductible donations is more than the income for the year, you could carry forward the unutilised deductions for a maximum of five years<\/strong>. Any unutilised deductions will be deducted after accounting for trade losses and capital allowances.<\/p>\n\n\n\n

Read Also: 8 Organisations That Companies Can Volunteer And Partner With As Part Of The Business and IPC Partnership Scheme (BIPS)<\/a><\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"Whoever sows generously will also reap generously.\n","protected":false},"author":30,"featured_media":9816,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[95],"tags":[821,823,815,1551,569,787,167,1601,1370,1400],"yoast_head":"\nGuide To Claiming Tax Deductible Donations For Businesses In Singapore | DollarsAndSense Business<\/title>\n<meta name=\"description\" content=\"Businesses and individuals in Singapore can claim 250% tax deductions on the donations they make to any approved IPC.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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