Income Tax (Approved Institutions of a Public Character) Regulations 2004

No. S 39

Income Tax Act

(Chapter 134)

Income Tax (Approved Institutions of A Public Character) Regulations 2004

In exercise of the powers conferred by section 107(2) of the Income Tax Act, the Minister for Finance hereby makes the following Regulations:

Citation and commencement

1. These Regulations may be cited as the Income Tax (Approved Institutions of a Public Character) Regulations 2004 and shall be deemed to have come into operation on 1st January 2004.

Definitions

2. In these Regulations, unless the context otherwise requires —

“appropriate Central Fund Administrator”, in relation to an approved institution of a public character, means the Central Fund Administrator which approved the institution of a public character;

“approved institution of a public character” means an institution of a public character which is approved under section 37 of the Act by the Minister, the Comptroller or a Central Fund Administrator;

[S 386/2006 wef 01/07/2006]

“commercial fund-raiser” means any person who for reward solicits or otherwise procures money or other property for, or purportedly for, the benefit of an approved institution of a public character;

[S 386/2006 wef 01/07/2006]

“related approved institution of a public character”, in relation to a Central Fund Administrator, means an approved institution of a public character which is approved by that Central Fund Administrator.

Duty to donors

2A.—(1) An approved institution of a public character shall ensure that —

(a)

any information provided to donors or the general public is accurate and not misleading;

(b)

the following information is disclosed to every person from whom a donation is solicited —

(i)	the name of the approved institution of a public character to which the donation will be given;
(ii)	the purpose for which the donation will be used; and
(iii)	whether any commercial fund-raiser has been engaged in soliciting the donation;

(c)

any information relating to donors is kept confidential, and no information relating to a donor is given to any other person without the consent of the donor; and

(d)

any arrangement to solicit donations has adequate control measures and safeguards to ensure proper accountability and to prevent loss or theft of donations.

(2) Where any commercial fund-raiser is engaged by an approved institution of a public character to solicit donations —

(a)	the total amount of all donations collected by the commercial fund-raiser shall be paid directly to the approved institution of a public character;
(b)	any payment due to the commercial fund-raiser from the approved institution of a public character shall be paid separately by the approved institution of a public character; and
(c)	the commercial fund-raiser shall not deduct or set off any payment or expenses due to him from the donations collected. [S 386/2006 wef 01/07/2006]

Use of donations

3.—(1) Subject to this regulation, an approved institution of a public character shall use any donation which qualifies for deduction under section 37 of the Act only to fund any activity carried on by that institution which —

(a)	benefits the community in Singapore as a whole;
(b)	is in line with the objectives of the approved institution of a public character as stated in its governing instrument; and
(c)	in the case of an approved institution of a public character which is approved by a Central Fund Administrator, is in line with the objectives of that Central Fund Administrator.

(2) An approved institution of a public character may invest any donation which —

(a)	qualifies for deduction under section 37 of the Act; and
(b)	is not immediately required for use in accordance with paragraph (1),

in such investments as are permitted by law.

(3) The total fund-raising and sponsorship expenses of an approved institution of a public character for the financial year commencing on or after 1st July 2006, and for every subsequent financial year, shall not exceed 30% of the total gross receipts from fund-raising and sponsorships for that financial year, as determined by the following formula:

where E

refers to the total expenses relating to fund-raising for the financial year, including both direct and indirect expenses of any kind other than sponsorship expenses, and including payments made to commercial fund-raisers engaged by the institution;

refers to the total gross receipts from fund-raising, other than receipts from sponsorships, for that financial year; and

refers to the total cost or value of sponsored goods and services relating to fund-raising for that financial year as stated in receipts or other documentary evidence presented to the institution, and may in the discretion of the institution include the cost or value of any sponsored goods and services where such receipts or documentary evidence are not available.

[S 386/2006 wef 01/07/2006]

(4) Any donation received by an approved institution of a public character shall only be used —

(a)	where the donor has specified an intention that the donation should be used for any specified lawful purpose, for that purpose; or
(b)	where the donor has not specified such an intention, according to the purpose communicated to the donor under regulation 2A(b)(ii). [S 386/2006 wef 01/07/2006]

(5) Where a donation, or any part of it, cannot be used for any of the purposes specified under paragraph (4), the approved institution of a public character shall —

(a)	refund the amount to the donor; or
(b)	use the amount for such other purposes as may be approved by the Comptroller or the appropriate Central Fund Administrator, as the case may be. [S 386/2006 wef 01/07/2006]

Issue of tax deduction receipts

4.—(1) This regulation shall apply to any approved institution of a public character which is allowed to issue tax deduction receipts and to any approved institution of a public character which, in its capacity as a Central Fund Administrator, issues any tax deduction receipt in respect of any related approved institution of a public character under regulation 3(5) of the Income Tax (Central Fund Administrators) Regulations 2004 (G.N. No. S 40/2004).

(2) An approved institution of a public character may issue a tax deduction receipt to every donor upon the receipt of a donation which qualifies for deduction under section 37 of the Act.

(3) Any tax deduction receipt issued under paragraph (2) shall —

(a)

incorporate the following statement:

“This donation is tax deductible. For individual donors: This receipt is for your retention. You do not have to claim the deduction in your tax form if you have given your NRIC/FIN number. The deduction will be automatically included in your tax assessment. For other donors: Please retain this receipt for submission to the Comptroller of Income Tax.”;

(b)

where the donation is made in accordance with section 37(6) of the Act, incorporate the additional statement as follows:

“Naming Donation — Single Tax Deduction Only.”;

(c)

state the name of the appropriate Central Fund Administrator, where applicable;

(d)

be serially numbered; and

(e)

be signed by either the treasurer of the approved institution of a public character or by any person to whom such function is delegated by its board of trustees.

(4) Where the donor receives some form of benefit in return for any donation but section 37(6) of the Act does not apply to the donation, an approved institution of a public character shall not issue a tax deduction receipt for the donation.

(5) An approved institution of a public character may use such electronic medium as may be specified by the Comptroller to issue the tax deduction receipts.

(6) The form of the tax deduction receipts issued by an approved institution of a public character which is approved by a Central Fund Administrator shall be approved by that Central Fund Administrator.

(7) Where there is a change in the name of an approved institution of a public character, the approved institution of a public character shall issue every tax deduction receipt under its new name with immediate effect from the date of such change.

(8) An institution of a public character shall not issue any tax deduction receipt after it ceases to be an approved institution of a public character.

Duty to maintain donation records

5.—(1) This regulation shall apply to any approved institution of a public character which is allowed to issue tax deduction receipts and to any approved institution of a public character which, in its capacity as a Central Fund Administrator, issues any tax deduction receipt in respect of any related approved institution of a public character under regulation 3(5) of the Income Tax (Central Fund Administrators) Regulations 2004 (G.N. No. S 40/2004).

(2) An approved institution of a public character shall maintain a record showing the particulars of every donation received which qualifies for deduction under section 37 of the Act which shall include, in respect of every donation —

(a)	the receipt number (in numerical sequence);
(b)	the name of the donor;
(c)	the identification number, or corporate or business registration number, of the donor;
(d)	the date the donation was received;
(e)	the type of donation received;
(f)	the amount or value of the donation received;
(g)	any terms and conditions under which the donation was made; and
(h)	where the donation was made in accordance with section 37(6) of the Act, the relationship between the donor and the recipient of the donation.

(3) An approved institution of a public character shall maintain the record referred to in paragraph (2) for a period of 7 years from the year of assessment relating to the year in which the donation is received.

Duty to maintain accounting records

6.—(1) An approved institution of a public character shall maintain accounting records, which shall in particular contain entries showing —

(a)	all the donations received and disbursed which qualify for deduction under section 37 of the Act;
(b)	details of all the income received and the expenses incurred;
(c)	the extent to which the amount of donations received which qualify for deduction under section 37 of the Act has met the target set by the approved institution of a public character, where applicable; and
(d)	the period during which the amount of donations which qualify for deduction under section 37 of the Act can be raised, where applicable.

(2) Where an approved institution of a public character is a separate fund, the person who administers the fund shall maintain separate accounting records for moneys received for the fund and shall comply with the approval period and the amount of donations approved to be collected, where applicable.

(3) An approved institution of a public character shall maintain the records referred to in paragraph (1) and, where applicable, paragraph (2) for a period of 7 years from the year of assessment to which the accounting entry relates.

Requirements relating to financial statement, audits, annual report, minimum membership, etc.

7.—(1) An approved institution of a public character shall disclose in its financial statement —

(a)	the total amount of donations received for the period which qualify for deduction under section 37 of the Act; and
(b)	any transaction with any related party, as defined in the applicable Financial Reporting Standards prescribed by the Council on Corporate Disclosure and Governance on related party disclosures. [S 386/2006 wef 01/07/2006]

(1A) An approved institution of a public character shall disclose in its annual report its policy relating to the management and avoidance of conflicts of interest.

[S 386/2006 wef 01/07/2006]

(1B) A large approved institution of a public character shall ensure that for the financial year commencing on or after 1st July 2006, and for every subsequent financial year, its financial statements comply with the Financial Reporting Standards as prescribed by the Council on Corporate Disclosure and Governance.

[S 386/2006 wef 01/07/2006]

(1C) A large approved institution of a public character shall have not less than 10 members.

[S 386/2006 wef 01/07/2006]

(1D) Where a large approved institution of a public character has fewer than 10 members, it shall —

(a)	immediately notify the Comptroller or the appropriate Central Fund Administrator of the occurrence of that fact; and
(b)	no later than 6 months from the occurrence of that fact, or such later time as may be approved by the Comptroller or the appropriate Central Fund Administrator, take such measures as are necessary to increase its membership to not less than 10 members. [S 386/2006 wef 01/07/2006]

(1E) The Comptroller may exempt a large approved institution of a public character from the requirements of paragraphs (1C) and (1D) under such circumstances as the Comptroller may deem fit.

[S 386/2006 wef 01/07/2006]

(1F) For the purposes of paragraphs (1C) and (1D), a reference to the “members” of an approved institution of a public character shall —

(a)	where the approved institution of a public character is a company or corporation within the meaning of the Companies Act (Cap. 50), refer to the directors of the company or corporation;
(b)	where the approved institution of a public character is a society registered under the Societies Act (Cap. 311), refer to the members of the society;
(c)	where the approved institution of a public character is a trust, refer to the trustees; and
(d)	in any other case, refer to the persons having the general control and management of the administration of the approved institution of a public character. [S 386/2006 wef 01/07/2006]

(1G) A large approved institution of a public character shall ensure that its annual report and audited financial statement are published —

(a)	on its own Internet website; or
(b)	where it does not have its own Internet website, on the Internet website of the appropriate Central Fund Administrator. [S 386/2006 wef 01/07/2006]

(1H) Where the total gross receipts of an approved institution of a public character from any single fund-raising appeal are not less than $1 million, the approved institution of a public character shall —

(a)

maintain separate financial accounts in respect of that fund-raising appeal; and

(b)

at the end of the financial year, disclose on its own Internet website or, where it does not have its own Internet website, on the Internet website of the appropriate Central Fund Administrator —

(i)	the total gross receipts from the fund-raising appeal;
(ii)	the total expenses incurred in the fund-raising appeal; and
(iii)	the purposes for which the funds raised in the fund-raising appeal were used or will be used. [S 386/2006 wef 01/07/2006]

(2) An approved institution of a public character shall cause its financial statement to be audited by an auditor who has been approved by the appropriate Central Fund Administrator, in respect of an approved institution of a public character which is approved by a Central Fund Administrator, or the Comptroller, in any other case.

(2A) An approved institution of a public character shall ensure that for the financial year commencing on or after 1st July 2006, and for every subsequent financial year, its auditor certifies in his report whether that institution has complied with the requirements of regulation 3(3).

[S 386/2006 wef 01/07/2006]

(3) The auditor’s report on the financial statement of an approved institution of a public character, for the purpose of submission to the appropriate Central Fund Administrator or the Comptroller under regulation 8(1), must be unqualified.

(4) An approved institution of a public character may apply for approval of a change in the auditor approved under paragraph (2) to the appropriate Central Fund Administrator or the Comptroller, as the case may be, in such form as may be approved by the Comptroller.

(5) The auditor of an approved institution of a public character shall be changed at least once every 5 years, whether to another auditor from the same auditing firm or company or to another auditor from a different auditing firm or company, failing which a qualification shall be made in the financial statement of the approved institution of a public character.

[S 386/2006 wef 01/07/2006]

(6) An approved institution of a public character shall disclose such information on its activities and financial accounts as may be required by the Comptroller and in such format as may be specified by the Comptroller —

(a)	on its own website; or
(b)	on the website of the appropriate Central Fund Administrator, where a related approved institution of a public character does not have a website,

unless —

(i)	the appropriate Central Fund Administrator waives the requirement to do so, in the case of an approved institution of a public character which is approved by a Central Fund Administrator; or
(ii)	the Minister or such person as the Minister may appoint waives the requirement to do so, in any other case. [S 386/2006 wef 01/07/2006]

(7) In this regulation, a “large approved institution of a public character” means an approved institution of a public character with gross annual receipts of not less than $10 million in each of its 2 immediately preceding financial years and, for this purpose, “gross annual receipts” shall include all income, grants, donations, sponsorships and all other receipts of any kind.

[S 386/2006 wef 01/07/2006]

Duty to furnish documents to Central Fund Administrator or Comptroller

8.—(1) An approved institution of a public character shall, within 6 months after the close of each of its financial years, furnish the following documents to the appropriate Central Fund Administrator if it is an approved institution of a public character which is approved by a Central Fund Administrator, or to the Comptroller in any other case:

(a)	its audited financial statements;
(b)	an auditor’s report on the use of donation moneys and whether such use is in accordance with the objectives of the approved institution of a public character;
(c)	an auditor’s report on the financial statement of the approved institution of a public character; [S 386/2006 wef 01/07/2006]
(d)	the fund-raising and expenditure plans of the approved institution of a public character for its following financial year; and [S 386/2006 wef 01/07/2006]
(e)	its annual report. [S 386/2006 wef 01/07/2006]

(2) An approved institution of a public character which is not allowed to issue tax deduction receipts under regulation 3(4)(b) of the Income Tax (Central Fund Administrators) Regulations 2004 (G.N. No. S 40/2004) shall furnish to the appropriate Central Fund Administrator an annual return of donations in such form as may be specified by the Comptroller no later than the last day of February of each year.

(3) An approved institution of a public character which is allowed to issue tax deduction receipts shall furnish to the Comptroller —

(a)	an annual return of donations in such form as may be specified by the Comptroller no later than the last day of February of each year; and
(b)	the details of every donation received which qualifies for deduction under section 37 of the Act in such form as may be specified by the Comptroller no later than the last day of January of each year.

Obligations of person who administers approved institution of a public character

9. Where an approved institution of a public character is not a body corporate, the obligations imposed on the approved institution of a public character under these Regulations shall be carried out by the person who administers the approved institution of a public character.

Amendment of governing instruments

10.—(1) An approved institution of a public character shall not amend its governing instruments except with the approval of the Comptroller or the appropriate Central Fund Administrator, as the case may be.

(2) Where an approved institution of a public character amends its governing instruments, a copy of the amended instruments shall be submitted by that institution to the Comptroller or an appropriate Central Fund Administrator, as the case may be, within 30 days from the date of amendment.

(3) For the purpose of this regulation, “governing instruments” shall include the memorandum or articles of association, constitution, by-laws, trust instruments or any rules or regulations governing the objects and administration of an approved institution of a public character, as the case may be.

[S 386/2006 wef 01/07/2006]

Suspension or withdrawal of approval

11.—(1) The approval of an approved institution of a public character by the Minister, the Comptroller or a Central Fund Administrator shall be withdrawn if —

(a)	the approved institution of a public character ceases to operate; or
(b)	the Minister, the Comptroller or the appropriate Central Fund Administrator determines that the approved institution of a public character no longer serves a purpose for public benefit.

(2) The Minister, Comptroller or the appropriate Central Fund Administrator may suspend or withdraw the approval of an approved institution of a public character where —

(a)	the approved institution of a public character fails to satisfy any condition specified in these Regulations or in regulation 4(1) of the Income Tax (Central Fund Administrators) Regulations 2004 (G.N. No. S 40/2004) at any time during its period of approval;
(b)	he is satisfied that there is or has been any mismanagement, misconduct, incompetence or negligence in the administration of the approved institution of a public character; or
(c)	he is satisfied that such action is necessary or desirable in the public interest.

(3) Where the approval of an approved institution of a public character has been suspended or withdrawn under paragraph (2) —

(a)	donations made to the approved institution of a public character after its approval has been suspended or withdrawn shall not qualify for deduction under section 37 of the Act;
(b)	the approved institution of a public character shall not issue any tax deduction receipts under regulation 4 in respect of donations made to the institution after its approval has been suspended or withdrawn;
(c)	the Comptroller or the appropriate Central Fund Administrator shall take reasonable steps to inform the general public of such suspension or withdrawal, and of the matters specified in sub-paragraphs (a) and (b); and
(d)	any donation made to the approved institution of a public character after its approval has been suspended or withdrawn, but before the general public has been informed by the Comptroller or the appropriate Central Fund Administrator of such suspension or withdrawal, shall be refunded to the donor without any deduction upon the donor’s request. [S 386/2006 wef 01/07/2006]

Extension of approval

12. Any application for the extension of the period of approval of an approved institution of a public character shall be made no later than —

(a)	2 months before the end of that period; or
(b)	any such time as may be stipulated by the Comptroller or the appropriate Central Fund Administrator. [S 386/2006 wef 01/07/2006]

Made this 21st day of January 2004.

LIM SIONG GUAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF (R) 32.9.16 V5; AG/LEG/SL/134/2002/14 Vol. 1]

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