21/02/23

SINGAPORE: Jurisdiction to launch new tax incentive scheme for donors with family offices.

As published on pinsentmasons.com, Tuesday 21 February, 2023.

Donors with family offices which operate in Singapore will be able to get 100% tax deduction for overseas donations via a new scheme, according to a report in the Business Times.

According to the report, the scheme is called philanthropy tax incentive scheme for family offices, which will be applied to overseas donations made via ‘qualifying local intermediaries’. The tax will be capped at 40% of the donor’s income.

To be eligible, donors must own funds under the Monetary Authority of Singapore (MAS) section 13O or 13U of the Income Tax Act and meet eligibility criteria. The MAS will provide more details by the end of June.

Tax and private wealth expert Valerie Wu of Pinsent Masons MPillay, the Singapore joint law venture between Pinsent Masons and MPillay said: “Almost all the ultra-high net worth (UHNW) clients for whom we have set up family offices and 13O funds or 13U funds have philanthropic causes close to their hearts – especially causes associated with their home countries. The new tax incentive will help fulfil the philanthropic visions of these clients, making Singapore an even more attractive destination for wealth management.”

“The new philanthropy tax incentive is no doubt one of Singapore’s first steps towards becoming a philanthropy hub. The new incentive will work hand in hand with the proposed reform of the Code of Governance for Charities and Institutions of a Public Character – due to be finalised and take effect in 2024,” Wu said.

Under existing rules, tax deduction for donations to approved Singapore-based Institutions of Public Character (IPCs) are up to 2.5 times the amount of the donation.