Singapore Eases Tax Rules On Overseas Donations

Editorial Staff

16 February 2023

The Singapore government is granting donors with family offices in the city-state 100 per cent tax deductions for overseas donations.

If donations are made through what are called "qualifying local intermediaries” the tax deductions will apply, according to press reports (Business Times, others) on new budget proposals.

“Raffles Family Office welcomes the Singapore government's announcement of a new tax incentive for donors with family offices. This incentive will be instrumental in driving philanthropic activities in the country, further enhancing Singapore's reputation as a top-tier wealth management centre and a regional philanthropy hub,” Kendrick Lee (pictured), managing partner and co-founder of Raffles Family Office, said. “This tax incentive scheme has immense potential to augment Singapore's goal and attract more capital over time. We are anticipating more details about the incentive's mechanism and implementation.”

It was stated that a tax incentive scheme would be introduced for qualifying donors with family offices operating in Singapore. To qualify, donors must have a fund under the Monetary Authority of Singapore’s (MAS) section 13O or 13U schemes and meet eligibility conditions, such as incremental business spending of S$200,000 ($149,556). The tax deduction is capped at 40 per cent of the donor’s statutory income.

The will give more guidance by 30 June.

Singapore has been rolling out other rules that affect family offices. For example, new Singaporean rules governing family offices are now in place. Taking force from April last year, these organisations face a tougher regime in order to benefit from tax-exempt incomes, although the Asian city-state is arguably creating a level of regulatory certainty that did not previously exist.

The change to the rule on donations appears to be the first time that overseas donations can capture a tax deduction. Until now, relief is given to donations to approved Institutions of Public Character of up to 2.5 times the donation amount.