IRAS first introduced Productivity and Innovation Credits (PIC) in Budget 2010 for the year of assessment (YA) 2011, to help companies and businesses increase their productivity and innovation activities in Singapore. During then, it was 30% cash pay-out capped at $100,000 per year.
On Budget 2013, an additional PIC bonus capped at $15,000 was announced. The dollar to dollar matching the expenditure is given on top of the regular 60% cash pay-out for YA 2013 to YA 2015. This scheme aims to help companies to defray operating costs. Many have benefited from the PIC bonus scheme including myself. The amount is not much, but it is good enough to cover some operating costs. Since it has been such a great initiative, everyone is hoping that the PIC bonus will be extended even after YA 2015.
In budget 2015, PIC bonus has ended and the regular PIC 60% Cash pay-out will remain the same till YA 2018.
When PIC bonus was introduced at first, many were skeptical about it. I have heard people telling me that, “how can the government be so good to give free money?” But after hearing successful cases of getting the PIC bonus, the news spread like wild fire and everybody started to think of ways of getting it. I will discuss some of the cases that are unacceptable in claiming the PIC which you may be already aware of.
1) Vendors offered to increase the equipment price and offer a cash rebate to you, in order to close the deal. The inflated price can then be use to increase the claim amount.
2) Vendors offered fake invoice for the submission of claims when there is no actual business transaction.
3) Vendors and company/business have an agreement that no payment is involved until PIC claim is received.
4) Company/business is set up with no intention of operating.
5) Company/business contributes CPF to 3 employees with no actual business needs (e.g., part-timer, family members, etc.).
1) Do note that, even if the claim is approved, IRAS may, within the next 5 years, check and ask for records to prove that the equipment were indeed installed and used by you and that payment was made. You will have to refund the PIC benefit if you are not able to produce sufficient records to prove the above. Penalties may apply as well.
2) Even if you engage a PIC consultant or your accountant to fill in the form for you, you are still responsible for the accuracy of the applications. You will bear the penalties if the PIC claim is found to be incorrect.
3) You will bear the penalties if IRAS subsequently finds that the 3 employees were not hired for genuine business purposes.
4) You will bear the penalties if IRAS finds that you are abusing the PIC scheme by making use of fraudulent arrangement to obtain PIC benefits.
IRAS takes unacceptable PIC applications very seriously. Anyone who is caught defrauding the government will be convicted to pay a penalty of up to 4 times of the cash pay-out amount and a fine of up to $50, 000 and/or imprisonment of up to 5 years. This includes abetment of fraudulent claim as well.
For more PIC-related enquiry please contact 66864882.