PIC Bonus Claim Abuse
The IRAS warn companies that they are actively looking for abuses in the PIC scheme.
The common PIC abuses are:
– Claiming for items that are not covered, such as swimming lessons disguised as training, iPads for those who are not employees, and university tuition fees paid for the boss’ children.
– Buying equipment that is not included on IRAS’ prescribed list, such as office furniture or basic telephones.
– Bundling equipment purchased with services such as warranty or maintenance, which are not covered.
– Providing insufficient information like CPF records, invoices, and bank statements to back up their PIC claims.
– Inflating PIC claims by creating invoices with higher prices than the real expenses.
– Disguising routine work as training expenses to claim a portion of the employees’ salary.
– Making false records for PIC claims, where no such purchased have been made, or the actual amount spent was lower.
– Creating shell companies to make multiple PIC claims or make PIC claims for purchases from related companies, when no such purchased have been made.
– Pretending to have more employees than their real number, in order to meet the criteria of having at least three workers to make their PIC claims.
– Making certain arrangements with the purpose to inflate artificially PIC claims.
– Inflating artificially the staff cost that was allocated for software development.
Firms in Singapore must respect some requirements in order to receive the PIC cash payouts,:
• They should have at least a part of their business operations that are active in Singapore;
• They should have expenses qualifying for the PIC scheme during the qualifying year;
• They should have a minimum of 3 local employees for which they made CPF contributions.
IRAS is not going to be tolerant on taxpayers who intentionally cheat claims on their PIC claims and any offenders are likely to be sent to court, as it already happened in the past. Firms in Singapore should always submit proper PIC claims and be aware that abusing the system can have serious consequences.
How to make sure you are not abusing IRAS PIC Claim?
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