Online Applications Cash Payout for the Productivity and Innovation Credit Compulsory
According to IRAS, the cash payout applications under the PIC Scheme is mandatory starting 1 August 2016.
August 12, 2016 ( datsyn.com) – The Inland Revenue Authority of Singapore (IRAS) reminded business owners and companies that the online applications for cash payouts that are under the Productivity and Innovation Credit Scheme or PIC Scheme is now compulsory effective 1 of August 2016.
This is following the tax changes that were announced by Finance Minister Heng Swee Keat during the Budget 2016. In terms of the PIC Scheme, the rate for cash payouts will decline from the former 60% of total qualifying expenditures to 40% which will take effect at the 1st of August. For companies that have qualifying expenditure incurred earlier, they will still be able to claim 60% cash payout given that they have e-filed their Year of Assessment (YA) 2017 cashout applications by 18 April 2017 if they are running a sole proprietorship or partnership, and 15 December 2017 if they are running a private limited company. The cap for the total expenditure in the six qualifying activities defined by IRAS remains to be at $100,000.
Meanwhile, there were no notable changes in the PIC component that provides entrepreneurs who are investing in the six qualifying activities with a 400% tax deduction capped at a $400,000 spending per year.
The tax agency reminded the companies to ensure the accuracy of their PIC claims in an announcement published on their website: “Businesses are responsible for the authenticity and accuracy of their claims regardless of whether they file the claims on their own or with the help of consultants or vendors. IRAS would like to remind businesses not to be misled by incorrect information about PIC claims from third parties,” declared the tax agency.
“The programme has helped many SMEs, has improved productivity, and has fostered an environment that pursues quality growth since its inception in the Year of Assessment (YA) 2011. Many businesses in the Food and Beverage industry have availed of the PIC scheme by upgrading to e-menus and other innovative investments that drive up productivity. This is a good way to get some investment back either in cash or even tax deductions while improving business efficiency,” says Richmond Corporate Advisory Pte. Ltd. (www.rbcrca.com.sg), a complete corporate solutions provider offering Singapore accounting and tax services.
The Budget 2016 also noted that the PIC Scheme will no longer be running after the Year of Assessment 2018.
Richmond Corporate Advisory Pte. Ltd. (www.rbcrca.com.sg) offers cost-effective and expert Singapore company registration, offshore company formation, Singapore branch office setup, accounting, secretarial, bookkeeping, and taxation services to small and medium-sized private limited companies in Singapore.