Penalty for PIC Abuses
Business owners convicted of abusing the scheme will have to pay a penalty of up to four times the amount of cash payout falsely claimed, a fine of up to S$50,000 or imprisonment of up to five years or both. Those caught wilfully assisting another to obtain the cash payout or PIC bonus even if the person is not entitled to will also face similar penalties.
Things to note to prevent wrongful claims
1. Ensure three local employees
If your company makes CPF contributions for at least three local employees (Singapore Citizens or PRs) regardless whether on full-time or part-time basis, then it meets the above mentioned condition. Sole-proprietor, partners or shareholders who are appointed directors of the company are not to be considered as employees.
2. Active usage
The company making the claim must provide evidence that the equipment are in use. This condition ensures that the equipment purchased indeed enhances and increases productivity.
Common Mistakes when Claiming PIC
- Claiming PIC on Non-Qualifying Expenditure
- Claiming both Cash Payout and Tax Allowances on the Same Expenditure
- Claiming Tax Allowance for Expenditure on Equipment Not Classified under the PIC IT and Automation Equipment List
- Incomplete PIC Cash Payout Application Form during Submission
- Insufficient Supporting Documents to Substantiate Claims
Need us to help you make sense of all these?
Our professional team of accountants have dealt with numerous claimants, therefore they have vast knowledge and experience having managed multiple scenarios and different claim types. They will be able to give you a comprehensive review of claims and advice you on what is allowed and what is not. Our accountants are also trained to strictly follow the requirements as set by IRAS.