April is here, which means it’s time for us to pay our annual taxes to the Inland Revenue Authority of Singapore (IRAS).
But if you don’t already know, you can actually donate to a registered charity (specifically, an approved Institution of a Public Character) and get a sizeable tax deduction in return. What tax deduction means is you get a portion of your assessable income knocked off, so you’re taxed less. So not only can you do a good deed and possibly make someone’s day, you actually can save some cash.
For full information, head to the IRAS website. But if you’re strapped for time, read on as we tell you how.
1. What you need to know
a. Not all cash donations made to charities in Singapore are tax deductible. Specifically, the donation would have to go to an approved Institution of a Public Character (IPC) or the Singapore Government for “causes that benefit the local community,” according to IRAS, to be tax deductible.
b. Ensure that the cash donation is attached to your name and registered with your NRIC/FIN/UEN at the time of donation. The receipt would also indicate the words “Tax-Deductible”. Your details will be sent by the IPCs to IRAS to include in your tax assessment.
c. The donation must not entail a material benefit to you. Some of the benefits that exclude tax deduction include advertising space, charity auctions and lucky draws. IRAS has detailed various scenarios that could arise from your donation and whether it can be deductible, which you can access here. This applies to both individual and corporate donors.
d. Anonymous donors who don’t want to claim tax deductions do not need to provide their tax details to the IPCs. However, if you wish to claim deduction subsequently, you ought to provide the necessary details to the IPCs who would then resubmit to IRAS.
e. If the tax deduction is more than your income for the year, the donor (i.e. individuals, companies, trusts, bodies of persons) can carry forward the unutilised deductions for a maximum of five years. Corporate donors however, need to complete and satisfy a shareholding test first, to certify that there has been no substantial change in the shareholders and their shareholdings.
2. How much do you get back
During his 2018 Budget Speech, Finance Minister Heng Swee Keat declared that the 250 per cent tax deduction for qualifying donations will be extended till December 31, 2021, in order to encourage locals to give back. This means that if you had donated S$10,000 in a year, you can get a tax deduction of 10,000 x 2.5 = S$25,000.
However, for donations done in 2015 (Jan 1 to Dec 31, both dates inclusive), the tax deduction rate has been increased to 300 per cent in conjunction with the SG50 celebrations.
The 2019 Budget has also stated that “businesses also enjoy a 250 per cent tax deduction on qualifying expenditure when their employees volunteer or provide services to IPCs under the Business and IPC Partnership Scheme,” as reported in The Straits Times.
Photo: IRAS website
3. Where to donate
With over 600 IPCs in Singapore, you’re literally spoiled for choice on where to donate for tax relief. Below, we’ve rounded up some of these institutions.
Arts and Heritage
Kreta Ayer People’s Theatre Foundation
Photo: Kreta Ayer People’s Theatre/Facebook
Located next to the Kreta Ayer Community Club, Kreta Ayer People’s Theatre Foundation is the brainchild of former Deputy Prime Minister Goh Keng Swee and it aims to promote Chinese opera as a traditional performing art form in Singapore. The foundation provides financial aid to the poor and needy in the neighbourhood as well as those from outside the constituency, besides the preservation and promotion of music, theatre and multi-cultural activities.
Art Outreach Singapore Limited
Photo: Art Outreach Singapore/Facebook
Founded in 2003, the goal of Art Outreach Singapore is to educate the public on visual literacy and appreciation of art history, and to be able to critically engage with various visual art forms. The organisation does so through its art education programmes for primary and secondary school students, as well as through events and tours for the general public.
Social and Welfare
Association of Women for Action And Research
The Association of Women for Action And Research (AWARE) uses a three-pronged approach — research and advocacy, education and training and support services — to promote gender equality in Singapore. Besides championing causes for lower income women and single parents, AWARE also provides services to women that include a crisis helpline, legal advice, sexual assault care centre and counselling and support groups. Their website also provides education on topics such as family violence, sexual assault and eating disorders.
Photo: Rainbow Centre, Singapore/Facebook
Founded in 1987, the Rainbow Centre provides education, support and training to youths between the ages of seven and 18 with special needs, such as autism, and their families. They aim to nurture them into “adults who are able to live independently, grow continuously, and live in community interdependently”. Rainbow Centre currently operates three schools located in Margaret Drive, Yishun and Woodlands.
Action for Aids
Photo: AfA Singapore/Facebook
Supported by a group of healthcare professionals, advocates, educators and volunteers, the Action for Aids (AfA) provides a series of educational, testing, treatment and welfare programmes for people of all sexual orientations across the spectrum. Some of these include an anonymous testing service held at the Department of Sexually Transmitted Infections Control (DSC) clinic at Kelantan Lane and a mobile testing service.
Muhammadiyah Health & Day Care Centre
Photo: Muhammadiyah Health & Day Care Centre/Facebook
With Singapore’s rapidly aging population, healthcare services that support the elderly will become increasingly critical. Founded in 1997, the Muhammadiyah Health & Day Care Centre is one such provider. The centre offers community-based healthcare, daycare and rehabilitation programmes for the elderly suffering from post-stroke conditions, Parkinson’s disease, post-amputation, arthritis and rheumatism, and is open to people of all races, religions and beliefs.
- Action for AIDS
- Art Porters Gallery
- association of women for action and research
- Inland Revenue Authority of Singapore
- Kreta Ayer People's Theatre
- Kreta Ayer People's Theatre Foundation
- Muhammadiyah Health & Day Care Centre
- Rainbow Centre
- sex in the shower
- tax deduction
- tax relief
- tax season