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Donations for Tax Minimization in Singapore

Donations for Tax Minimization in Singapore

Singapore is a very attractive Southeast Asian countries because of the many incentives offered to local and foreign investors and citizens coming here for starting businesses or simply for employment reasons. Among these incentives are the ones related to the possibility of reducing some of the taxes they pay.

There are various tax minimization solutions for companies and citizens in Singapore, one of the most important being donations.

Those interested in reducing the taxes they pay by making donations in Singapore have several ways of doing that. These donations are explained below by our company formation agents in Singapore.

We are also experienced in offering business registration solutions, so if you want to open a company in Singapore, you can fully rely on us.

The main donation options in Singapore

According to the Inland Revenue Authority in Singapore, the following donations can be done in order to reduce the taxes one pays here:

  • –          cash donations which can be made to certain authorities or to the government;
  • –          share donations can also be made by Singapore companies to the Stock Exchange in the city-state;
  • –          artifact donations can also be made by individuals or companies to museums in Singapore;
  • –          donations made under the Public Art Tax Incentive (PATIS) program in Singapore;
  • –          donations made under the form of land plots and buildings in Singapore.

For all these donations, the person or company making them can obtain tax deductions which can be used as tax minimization solutions in Singapore.

Cash donations for tax minimization in Singapore

One of the easiest ways of reducing the taxes paid in Singapore is by making cash donations to institutions approved under the Public Character Institutions program which can be found with the Ministry of Culture, Community and YouthCash donations can also be made directly with the government. These donations must benefit the local community.

In order to benefit from the tax deductions associated to these donations, the party making the donation must obtain no material benefit from it. Also, the donation must have no resale value.

This type of donations can be used as tax minimization solutions by both natural persons and companies in Singapore.

Share donations for company shareholders seeking to minimize taxes in Singapore

Singapore companies can also make donations under the form of shares or units held in Singapore trusts. In order to qualify for the tax minimizations offered under this scheme, a few conditions must be respected. The donation must be made by the shareholders of the company and the shares must be publicly listed on the Stock Exchange.

Our Singapore company formation specialists can offer full information on how list shares on the Stock Exchange in the city-state.

Art donations in Singapore

One of the most advantageous ways of minimizing taxes in Singapore is by donating works of art or by entering the Public Art Incentive Tax Program.

When it comes to donations made under the form of artifacts, these must be donated to museums which have the status of approved museums granted by the National Heritage Board and the works donated must be considered worthy by the same Board.

When it comes to the Public Art Incentive Tax Program, the following conditions must be met:

  1.           the donations can take the form of money given for the maintenance or installation of works of arts;
  2.           the donation can take the form of a sculpture to a museum which will display it to the public;
  3.           the donations can take the form of artworks and are considered artistic or heritage works by the National Heritage Board;
  4.           the value of the work of art must be assessed by the National Heritage Board in Singapore.

Both natural persons and companies can qualify for receiving tax deductions for this type of donations. We also remind that you can count on us if you want to open a company in Singapore.

Donations under the form of land and buildings in Singapore

It is also possible for Singapore companies and individuals to make donations under the form of land or buildings in order to obtain various tax deductions. For this purpose, the donor must first have the value of the donation appraised.

When it comes to the deductions offered by the Inland Revenue Authority, those who qualify for them can obtain up to 250% deductions for the donations qualifying for the conditions imposed by the government. These deductions are available until the end of 2021.

For full information on how to minimize your taxes through donations, please feel free to contact our local consultants who can also offer tax advice and services in Singapore. You can also rely on our local specialists if you want to open a Singapore company.