Overseas Humanitarian Assistance Tax Deduction Scheme
An Overseas Humanitarian Assistance Tax Deduction Scheme (“OHAS”) will be piloted for four years from 1 January 2025 to 31 December 2028.
The OHAS will grant both individual and corporate donors a 100% tax deduction for eligible overseas cash donations. To qualify for tax deductions, overseas cash donations must satisfy the following two conditions:
- Donations must be channeled through a designated charity. These charities are required to include emergency humanitarian assistance within their charitable objectives and have bolstered governance and measures to prevent illicit fund flows. Charities meeting these criteria will be invited to partake in the pilot. The roster of designated charities will be accessible starting from 1 January 2025.
- Donations must be directed towards a fundraiser specifically designated for emergency humanitarian assistance and supported by a valid Fund-Raising for Foreign Charitable Purposes (“FRFCP”) permit issued by the Commissioner of Charities (“COC”). Designated charities are mandated to obtain an FRFCP permit from the COC before initiating any fundraising campaign for emergency humanitarian assistance purposes.
Upon reviewing the FRFCP permit application, the COC will ascertain whether the fundraiser pertains to an emergency humanitarian assistance cause. Emergency humanitarian assistance denotes aid provided in response to a particular incident with a distinct trigger, such as natural disasters (like earthquakes or floods) or other sudden crises (such as pandemics). This assistance typically involves the swift provision of essentials like food, clean water, shelter, medical care, and support for search, rescue, and evacuation operations.
Tax deductions offered by OHAS will be limited to 40% of the donor’s statutory income. If a donor is also eligible for tax deductions under the Philanthropy Tax Incentive Scheme for Family Offices (“PTIS”), the combined tax deductions from both OHAS and PTIS will not exceed 40% of the donor’s statutory income.
Unutilized tax deductions from OHAS cannot be carried forward to offset the donor’s income in future Years of Assessment (“YA”), nor can they be transferred to another company within the same group under the Group Relief System for any YA.
More details about this scheme will be announced from IRAS by 30 June 2024.
