Tracking online/ATM donations to your non-profit organisation

If your non-profit organisation doesn’t have an account with Paypal or some other online payment platform, your donees can still make donations direct to the bank account of your organisation via online banking or, ATM transfer.

However, the process flow for the Secretariat in terms of managing direct monetary transfers would be a little more complex, as the details of the donation would not appear until your next bank statement is issued by the Bank. In addition to being issued only several weeks after the transaction, the bank statement would also not reveal the details of the done for the purposes of issuing a receipt.

A suggestion here would be to have your donees notify the secretariat via email that they have made an online transfer, together with the following details:

*Name:

*Date :

*Amount donated (in RM):

*Bank account no. :

*Contact details for issuance of receipt

If the transfer has been made via ATM, a scanned copy or a phone snapshot of the ATM slip could be attached to the email.

The Secretariat could then record the donation and corresponding details. 

Non-profit organisations receiving donations via Paypal

To all non-profits and charitable organisations out there – be careful when setting up a Paypal account to receive donations online.

It’s easy enough to set up the account, but you could soon find yourself running into difficulties.

If you claim that your organisation is a non-profit organisation, and thereby eligible for the special rate offered to non-profit organisations by Paypal, Paypal will immediately freeze your account and ask for “proof” of non-profit status or rather, “proof” that the organisation “is allowed” to collect donations.

This happened to us after several donors had already donated using the Paypal “Donate” button on our website.

What subsequently followed was a lengthy exchange between ourselves and various account managers, during which we sent them copies of supporting documentation ranging from our certificate of registration with the Registry of Societies to copies of our Annual Returns lodged with the Registry of Societies for the preceding financial year, which clearly indicated that donations are received by the organisation.

They refused to accept the documents we provided or the arguments that we put forward, and kept asking for proof of tax-exempt status (which we do not yet have, being a newly-registered society). 

In the end, we had to just give up and close the account. The donations in the account were refunded to the donors in full, but after a very long time.

So to be safe, unless your organisation already has tax-exempt status, use a different platform for online donations. 

GST and non-profit organisations

Worrying about GST and how it is likely to affect your organisation, seems to have become something of a national pastime these days!

Charitable organisations and non-profits are also concerned as to how they will be affected, if at all.

Jabatan Kastam Diraja Malaysia or the Malaysian Customs Department has put up a general guide at http://gst.customs.gov.my/en/rg/SiteAssets/general_guides/Revised/General%20Guide%20-revised%20as%20at%2027%20October%202013.pdf

Pg 77

Societies and Similar Organisations

254. Societies and similar organisations refer to any club-type organization registered under any written law.

255. The supply of goods or services by any society or similar organization shall

not be treated as a supply if:-

(a) the supply to its members is related to its aim and objectives and

available without payment other than a membership subscription and

the value of the supply is nominal; or (b) the supply to a donor or sponsor has no commercial value.

For further details, please refer to the GST Guide on Societies and Similar

Organizations (including Charitable Entities).

Charitable Entities

256. Charitable entities which are established exclusively for charitable purposes

and for the benefit of the community or an appreciably significant part of it. Charities

entities may be involved in business and non-business activities.

257. All charitable entities are required to be registered and charge GST on their

taxable supplies if:-

(a) they carry on business; and

(b) their supplies exceed the prescribed threshold.

These entities need to pay GST on their acquisition.

258. Selective charitable entities are given tax relief to acquire certain goods or

services for charitable purpose and relieved from charging tax (for GST registered

person) on supply of goods or services to its members in accordance with their

charitable objectives irrespective of whether supplied free, at nominal cost or at a

nominal charge as specified under Goods and Services Tax (Relief) Order 20XX.

Selective charitable entities refer to charitable entities for disabled and handicapped;

orphanage and children; and senior citizen health care and rehabilitation.

For further details, please refer to the GST Guide on Societies and Similar Organizations

(including Charitable Entities).