Charities and non-profit organisations are required to register for GST if their annual taxable supplies exceed S$1 million even if they are engaged mostly in non-business activities.
When you receive grants, donations, and sponsorship freely from the givers, and do not provide benefits in return to the givers, the amounts received do not attract GST (i.e., you do not need to factor in GST on the grants, donations, and sponsorship).
However, when you provide benefits in return to the giver of grants, donations, and sponsorship, you are treated as making a supply. You have to account for output tax at the prevailing tax rate on the open market value (OMV) of the benefits.
When the OMV is not available, you should account for GST at tax fraction (e.g. 7/107) on the money received or at the prevailing tax rate on OMV of goods or services received.
Understand your GST-related obligations as a charity organisation by connecting with a GST services provider in Singapore.
Donations to Registered Charities or Institutions of a Public Character (IPC)
In this case, certain donations to registered charities or IPC are deemed to be pure donations even when there is a benefit given in return for the donations. The recipient of the donations need not account for GST.
To qualify for the concessionary tax treatment, the benefits must be treated as having no commercial value. The following conditions must be met:
- the benefit is given in acknowledgment of the donation; and
- the benefit has no resale value.
Learn how charities are required to charge GST in Singapore
Non-profits including charities in Singapore must register for GST if their annual taxable supplies exceed S$1 million. Consult our experts for more guidance.