SINGAPORE: From Jul 1 this year to the end of 2018, some businesses in Singapore will enjoy up to 250 per cent tax deduction on wages and related expenses, the Ministry of Finance (MOF), Inland Revenue Authority of Singapore (IRAS) and Ministry of Culture, Community and Youth (MCCY) said in a joint press release on Thursday (Jun 30).
The tax deduction applies to companies that send employees to volunteer and provide services, including secondments, to Institutions of a Public Character (IPCs) under the Business and IPC Partnership Scheme (BIPS), subject to receiving IPCs’ agreements, the authorities said.
The services include professional services such as in the areas of legal, human resources and accounting, or general voluntary services for IPCs, they added.
IPCs are registered charities that are allowed to issue tax-deductible receipts to donors who want to claim tax relief based on the amount of qualifying donations made. These charities must serve the needs of the community in Singapore as a whole, and not be confined to sectional interests or groups based on race, belief or religion, according to MCCY’s website.
Currently, donors to IPCs already enjoy tax relief for 250 per cent of the donations.
BIPS was introduced in Budget 2016 to encourage employee volunteerism through businesses, and forms part of the Government’s efforts to promote philanthropy and volunteerism.
When he announced the scheme on Mar 24, Finance Minister Heng Swee Keat said it would boost corporate social responsibility (CSR) and make it easier for employees to give back through their workplaces.
In their press release on Thursday, the authorities said: “Through volunteering activities or secondments, businesses and IPCs can build enduring and sustained partnerships, benefiting both parties … In the long run, the Government hopes to foster a widespread culture of caring in Singapore, where businesses and employees can play a greater role in meeting social needs and building a caring and cohesive society.”
The scheme comes with some caveats, however. For example, the donation of goods and wages of the owners of sole proprietorships, partnerships and companies do not qualify for the tax deductions. The companies must also not have applied for other incentive schemes for the same services, and there is a cap of S$250,000 per year of assessment and S$50,000 per calendar year for the expenditure of each business and IPC respectively.
news source: channelnewsasia.com