Exemption of income of charities
13M.—(1)  Subject to this section, there shall be exempt from tax the income of any charitable institution, trust or body of persons established for charitable purposes only.
[24/2001]
(2)  For the purposes of this section —
(a)where a trade or business is carried on by any such charitable institution, trust or body of persons, the income derived from the trade or business shall be exempt from tax only if the income is applied solely for charitable purposes and —
(i)the trade or business is exercised in the course of the actual carrying out of a primary purpose of such institution, trust or body of persons; or
(ii)the work in connection with the trade or business is mainly carried on by persons for whose benefit such institution, trust or body of persons was established;
(b)the other income of any such charitable institution, trust or body of persons shall be exempt from tax only if it applies in any year of assessment for charities or charitable objects within Singapore not less than 80% of the amount of donations (in money or money’s worth) received by it and of other sums accrued to it in the preceding year unless the Comptroller otherwise permits; and
(c)if any such charitable institution, trust or body of persons applies any amount of its income otherwise than in accordance with its charitable objects, the institution, trust or body of persons shall pay to the Comptroller tax on that amount of its income and a determination and assessment under this paragraph shall be treated as a notice of assessment and shall be subject to the provisions of Parts XVII and XVIII.
[24/2001]
(3)  For the purposes of subsection (2)(b), the amount of donations (in money or money’s worth) received by and other sums accrued to any such charitable institution, trust or body of persons for any year shall be ascertained by taking the aggregate in that year of —
(a)donations in cash received by it;
(b)proceeds from the disposal of all properties donated to it on or after 1st April 2003 (after deducting costs directly related to the disposal);
(c)gains or profits from the disposal of all properties acquired by it on or after 1st April 2003 (after deducting costs directly related to the disposal);
(d)proceeds, gains or profits, as the case may be, from the disposal of properties donated to it or acquired by it before 1st April 2003 and disposed of on or after that date, and for the purpose of this paragraph, this section in force immediately before that date shall apply; and
(e)income (after providing for allowable deductions) not falling under paragraphs (a) to (d).
[21/2003]
(4)  For the purposes of the deleted subsection (3)(d), (f) and (g)3 in force immediately before 1st April 2003 and subsection (3) (b) and (c), any securities received or acquired on an earlier date shall be deemed to have been disposed of first.
3  Subsection (3)(d), (e) (f) and (g) was deleted by Act 21 of 2003.
[24/2001; 21/2003]
(5)  Where the total of the gains, profits or proceeds in any year from the disposal of properties or securities in the deleted subsection (3)(d), (e), (f) and (g)4 in force immediately before 1st April 2003 and subsection (3)(b) and (c) is less than nil, it shall be deemed as nil.
4  Subsection (3)(d), (e) (f) and (g) was deleted by Act 21 of 2003.
[24/2001; 21/2003]
(6)  For the purposes of determining the date of acquisition or donation of the shares and the cost of the shares acquired —
(a)rights issues shall be deemed to have been acquired on the date the rights were exercised; and the cost in respect of each share after the exercise of the rights shall be the price paid for the acquisition of the shares; and
(b)bonus shares and shares arising from a share split (referred to in this subsection as split shares) shall be deemed to have been acquired or donated —
(i)where the original shares upon which the bonus shares or split shares are derived were acquired on or after 1st April 2003, on the date of acquisition of the original shares; and for this purpose, the cost in respect of each share after the bonus issue or the share split shall be determined in accordance with the formula
X
,
Y
 
where X is the cost of the shares at the date of acquisition; and
Y is the total number of the original shares, bonus shares and split shares; and
(ii)where the original shares upon which the bonus shares or split shares are derived were donated on or after 1st April 2003, on the date of donation of the original shares.
[21/2003]
(7)  The Minister may make regulations which are necessary or expedient for carrying out the purposes of this section.
[24/2001]
(8)  In this section —
“disposal”, in relation to any properties —
(a)means the assignment, sale, settlement or transfer of the properties, whether by agreement or otherwise; and
(b)includes the creation of a trust in respect of the properties,
but does not include the conversion of debt securities to equity securities where the conversion is in accordance with the terms and conditions of the issue of the debt securities;
“property” includes movable and immovable property of any kind, tangible or intangible.
[24/2001; 21/2003]