New tax scheme for Singapore philanthropy

Singapore is set to implement a new tax scheme that will enable donors with family offices to receive a 100% tax deduction for overseas donations, effective on January 1st, 2024. This marks a significant shift in the country’s philanthropic landscape, as tax relief was previously limited to donations made to approved organizations benefiting Singapore-based causes.

While details are currently not clear, there are signals that the government is committed to this course of action. To qualify for this philanthropy tax incentive scheme, donors must have a fund registered under the Monetary Authority of Singapore, meeting specific conditions such as incremental business spending of at least S$200,000. The deduction will be capped at 40% of the donor’s statutory income.

Importantly, the donations must be funneled through local intermediaries to be eligible for the tax incentive. By doing so, the scheme aims to ensure that the funds are managed by family offices in Singapore, aligning with the relevant Monetary Authority Singapore’s schemes, and directed toward philanthropic purposes.

Industry experts have hailed this move as a positive development, positioning Singapore as a regional philanthropy hub. Family offices often have a global approach to philanthropy, and this tax incentive allows them to support overseas causes alongside local charities. By leveraging the country’s reputation as an international wealth management center, the scheme aims to attract more high-net-worth individuals and catalytic capital to Singapore.

As more details are being released by the Monetary Authority of Singapore, individuals and family offices interested in the scheme should consult with tax professionals or financial advisors for precise guidance on the qualifying intermediaries and the process for claiming the tax deduction.

Singapore’s philanthropic landscape is poised for transformation, opening new avenues for charitable giving and global impact. The expected changes will present a great opportunity for organizations anywhere in the world to tap into the philanthropic ambitions of Singapore-based donors.

Practically, from the moment the changes are announced, individuals, family offices and other donors in Singapore, will be allowed to transfer funds to support overseas charity causes, and claim tax deductions. Singapore will become a major donor base in the region and a very lucrative new donor market. And HVFC International is very well-placed in accessing this new donor market, having already established a presence in Singapore.