The Singapore Government introduced a Philanthropy Tax Donation Scheme for Family Offices as part of the 2023 Budget Announcement on 14 February 2023, with further updates announced on 9 June 2023. This scheme, provides family offices a 100% tax deduction for overseas donations.
The scheme will run from 1 January 2024 to 31 December 2028 and the criteria for family offices to get the tax deduction for overseas donations include:
- Donations are to be made through qualifying local intermediaries
- Tax deduction will be capped at 40 percent of donor’s statutory income
- Donors must have a fund under the MAS’ Section 13O or 13U schemes, and meet eligibility conditions, such as incremental business spending of S$200,000 to qualify.
Successful applicants will be granted the award for a period of 5 years from their incentive commencement date and eligible applicants could be a:
- Single-Family Office in Singapore;
- the ultimate beneficial owner or beneficiary of the Section 13O or 13U fund managed by the family office, or
- A related family business operating in Singapore.
[UPDATE] On 5 July 2023, MAS announced more updates which bring a focus towards environmental and social causes by incorporating a broader range of investments in Singapore and overseas climate-related investments. The tax incentive will also recognise all investments in non-listed Singapore operating companies, the amount invested in Singapore-listed equities, eligible exchange-traded funds, and unlisted funds that invest primarily in Singapore-listed equities.
This scheme complements recent revisions to sections 13O and 13U of the Income Tax Act (ITA) and the extension of the 250% tax deduction for qualifying donations made to IPCs and other eligible institutions (applicable for the period 1 January 2024 to 31 December 2026).
If you are considering setting up in Singapore, use this guide by AVPN, developed in partnership with Singapore Economic Development Board (EDB). With this change to the tax code, family offices can better plan their giving strategies from Singapore to the region.