In brief: Six types of donations which are tax deductible
Singapore ranked 46th in the world in giving over the last decade (Source: World Giving Index). This report, published by the Charities Aid Foundation in the United Kingdom, has been examining the global giving trend since 2009. The index examined 3 aspects of giving:
- Helped a stranger, or someone they didn’t know who needed help
- Donated money to a charity
- Volunteered their time to an organisation
For a little red dot, Singapore has punched above its weight in terms of generosity quotient. In 2021, tax deductible donations received by IPCs in 2021 was $1.03 billion (Source: Commissioner of Charities Annual Report 2021), showing that the spirit of giving is strong in Singapore.
No doubt, tax deductions of 2.5 times the qualifying donations might have nudged us to open our wallets a little more. However, monetary donation is not the only kind of donation which lets you enjoy tax benefits while doing an altruistic deed.
Let’s learn about six types of donations which are tax deductible:
- Cash donations
Cash donations – by individuals and corporate donors – made to an approved Institution of a Public Character (IPC) for causes that benefit the local community, or the Singapore Government are tax deductible donations.
Only outright cash donations to approved IPC that do not give material benefit to the donor are fully tax deductible. If a donor receives a benefit in return for the donation made, tax deduction is granted only on the difference between the donation and the value of benefit.
However, if the benefits are treated as having no commercial value and the donation is made to IPCs on or after 1 May 2006, it will be deemed as pure donations although there are benefits given in return for the donation.
- Shares donations
For individuals, donations of public shares listed on the Singapore Exchange (SGX) or of units in unit trusts traded in Singapore to approved IPCs are tax deductible. However, donations of options and shares with restriction on holding periods are not allowed under this donation scheme.
- Artefact donations
Donations to museums by individual or corporate donors are tax deductible donations if:
- The museum has obtained the Approved Museum Status with the National Heritage Board (NHB) ; and
- The artefact has been deemed worthy of collection by NHB.
- Donation under the public art tax incentive scheme (PATIS)
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 qualify for tax deductions.
Qualifying donations under PATIS include:
- Donation of money or services given towards the installation or maintenance of the sculptures or work of art for public display;
- Donation of a sculpture to an approved recipient for indoor public display; and
- Public art works which are two or three dimensional with artistic and or heritage merits as desired by NHB.
- Land & building donations
From 1 Apr 2003, donations of land or buildings by corporate and individual donors 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 cost of valuation is not tax deductible.
- Naming donations
From 1 Jan 2005, the following donations are tax deductible:
- Donations to name IPCs, IPC facilities, events or programmes;
- Donations to name facilities of approved beneficiaries (including artefacts and public sculptures) under any of the other approved donation programmes; and
- 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).