Benefits

Benefits of PIC Scheme

PIC is open to businesses of every kind, provided they fulfill the criteria for being considered an SME. This means that trusts that are registered and carrying out business activities may also benefit from the PIC scheme, as long as they have incurred qualifying expenditure and have fulfilled the three conditions that are required by the IRAS.

Additionally, for every year of assessment, you are permitted to raise more than a single claim for PIC, as long as your cap of $400,000 per activity per year has not been exceeded, and the amount considered is taken net of any other government program or subsidy that the business has benefited from. Naturally, it follows that the same is applicable for the cash pay-out option, provided you have not exceeded the $60,000 open to each enterprise each year of assessment.

With the enhancement of the PIC scheme to the PIC+ scheme, caps for the tax deduction option were raised to $600,000, bringing the total amount in tax deductions per year up to $800,000 for the years of assessment from 2016 to 2018. Every option, however, remains bound by the terms and condition set out by the IRAS.

A business in each year of assessment may select only one of the PIC grant scheme pay-out options: the cash pay-out or the tax deduction. However, if the following year of assessment you wish to change the option from one to the other, this is allowed. What you cannot do is claim both options in the same year, even if you have not exceeded the caps laid out for each option.

The PIC bonus, however, comes as an extra with whatever option has been selected by the business, and does not require a separate application document. The IRAS reviews the application for the PIC option elected, then they determine if and how much of the bonus you will be paid, and lastly you will get the feedback with your application.

The IRAS will give cash payments within a three month period after the application is approved. However, a point to note is that even if the payment has been made, if the IRAS needs to, they reserve the right to re-open your application for further review when necessary.

PIC bonuses are paid out on dollar for dollar basis at $5,000 a year maximum for three years from 2013-2015. It is taxable, and is also paid out within three months of a successful application. Whether or not one receives the bonus is predicated on the merits of the application as determined by IRAS.