Approved charitable donations
You can apply for deduction of donations made to charitable organizations that are exempt from tax under Section 88 of the Inland Revenue Ordinance or cash donations made for charitable purposes to the government. You may also apply for deduction of approved donations made by your spouse that have not been claimed.
Not all donations made to tax-exempt charitable organizations are deductible. The following are examples of non-deductible donations:
- Amounts spent on purchasing lottery tickets
- Amounts spent on purchasing admission tickets for movies or charity events
- Amounts spent on purchasing cemetery plots
- Amounts paid for booking ritual worship venues
- Amounts spent on purchasing goods at charity sales events
- Donations placed in offering bags during Sunday worship services (unless the taxpayer can submit a receipt issued by a relevant church (which must be a tax-exempt charitable organization), in which case the donation is deductible).
The total amount of approved donations that may be claimed as deductions must be no less than $100. The deduction amount may not exceed 35% of your assessable profits for the year, after deducting allowable expenses and depreciation allowances or after subtracting your net total income for the year, whichever is lower. If you have more than one source of income and choose to be assessed on personal income tax, and your total approved charitable donations are not fully deductible under one tax category (such as profits tax), the balance may be claimed under personal income tax.
Application for Deduction
To apply for deduction, you can indicate the total amount of donations made during the relevant tax year in your individual tax return (BIR60). Donations that have already been claimed by your spouse cannot be claimed again.
Supporting Documents
When submitting your tax return, you do not need to provide supporting documents. However, for approved donation deductions, you need to keep receipts issued by tax-exempt charitable organizations or the government for a period of 6 years (starting from the end of the relevant tax year), so that the tax authority can inspect them in case of future audits.
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