Approved Charitable Donations
What kind of donation is eligible for tax deduction?
The donation must be a donation of money. Payments for purchase of lottery tickets or raffle tickets; admission tickets for charity shows; a grave space; goods in bazaar and services such as saying prayers, reservation of a space for ancestral worship were not eligible for tax deduction.
The donation must be made to a charitable institution or a trust of a public character, which is exempt from tax under section 88 of the Inland Revenue Ordinance, or to the Government, for charitable purposes. You can click the list of charitable institutions and trusts of a public character, which are exempt from tax under section 88 of the Inland Revenue Ordinance to check eligibility of the recipient of the donation.
I made a donation to an organisation, the name of which could be found in the list of charitable institutions and trusts of a public character, which were exempt from tax under section 88 of the Inland Revenue Ordinance, published on the Department’s website at the time of making the donation. However, when I later completed my Tax Return - Individuals, I could no longer find its name on the list. Can I claim tax deduction in respect of this donation?
The Department conducts periodic reviews on the recognition of tax exemption status of charitable institutions and trusts of a public character under section 88 of the Inland Revenue Ordinance and would withdraw such recognition where circumstances warranted. In general, if you make a genuine donation to an organisation whose name could be found in the list published on the Department’s website at the time of making the donation, you can claim tax deduction of such donation in the year of assessment in which the donation was made.
Can I claim deduction for money donated in the name of my children?
The money must be donated in the name of you or your spouse who is not living apart from you. Money donated in the name of your children is not deductible for tax purpose.
Is there any deduction limit?
The aggregate of your donation must not be less than $100. The maximum amount deductible is as follows:
|Year of Assessment||Income after allowable
expenses and depreciation allowances
|2005/06 to 2007/08||25%|
My salaries income for the year of assessment 2022/23 is $500,000 and my spouse’s income is $400,000. I made a donation of $200,000 to an approved charitable institution. No joint assessment is elected by us. What is the maximum amount of donations that can be allowed to me? Can my spouse claim the deduction for my unused balance of donations?
The maximum amount of approved charitable donations that can be allowed to you is restricted to $175,000 (i.e. 35% of your income after allowable expenses and depreciation allowances). If your spouse wishes to claim the unused balance of $25,000, he/she must complete Part 4.3(3) of his/her Tax Return – Individuals stating the exact amount of donations claimed.
My salaries income for the year of assessment 2022/23 is $500,000 and my spouse’s income is $150,000. I made a donation of $200,000 to an approved charitable institution. I understand that the maximum amount of donation that can be allowed to me is restricted to 35% of my income (i.e. $175,000). If I and my spouse elected to be assessed under joint assessment, can the unused balance of my donations (i.e. $25,000) be transferred to my spouse for tax deduction?
If you and your spouse are eligible to elect joint assessment and joint assessment is advantageous to you, and you are jointly assessed under salaries tax, the unused portion of your donations $25,000 will be deducted from your spouse’s income when effecting the joint assessment.
Do I have to retain supporting documents to substantiate my claims for deduction of donations?
Yes, when you make donations, you are advised to obtain receipts from the recipients and retain them for a period of 6 years after the expiration of the year of assessment in which the donations were made. You need not attach any supporting documents at the time of submission of your Tax Return - Individuals. You are required to produce receipts for examination if your case is selected for review.
If I cannot produce receipts to support my donation claim, what will be the consequence?
The consequence for failure to produce the receipts is that:-
- your claim for deduction will be rejected, or
if the deduction for donation had previously been allowed in good faith, the Assessor will withdraw the deductions and issue an additional assessment.
For any false claim cases, penalty will be imposed or prosecution instituted.
If I drop cash in the donation bag of a church, an approved charity, during Sunday masses, can I claim deduction for the donation made?
If you cannot produce donation receipts to prove the amount of donation made by you through dropping cash in the donation bag, your deduction claim will not be allowed.