On or about 2 December 2019, the Income Tax Act — Income Tax (Deduction for Expenditure for Services or Secondment to Institutions of a Public Character) Rules 2019 was updated on the Government Gazette.
The rules are the Income Tax (Deduction for Expenditure for Services or Secondment to Institutions of a Public Character) Rules 2019 and came into operation on 2 December 2019.
It seeks to broaden the scope of the Business and IPC Partnership Scheme (“BIPS”) under section 14ZB of the ITA.
Under BIPS, businesses can claim a 250% tax deduction on basic wages and related expenses incurred when their employees volunteer or provide services to IPCs, subject to the IPCs’ agreement.
The Income Tax Act has been amended to:
- allow businesses to claim tax deduction for wage expenditures of all employees, including part-time employees, when employees volunteer;
- allow businesses the additional option to claim tax deductions for wage expenditures based on fixed hourly rates for general or skills-based volunteerism rather than the actual wage expenditure incurred when employees volunteer
The amendments will take effect from the YA 2020.
Source: Singapore Status online, 2 December 2019