What is PIC Bonus?

The PIC bonus is given to the businesses that have invested in PIC qualifying activities. The bonus awards the businesses a dollar-for-dollar matching cash bonus for relevant Years of Assessment. It is subject to a total cap of $15,000 in all 3 YAs taken together. The PIC Bonus is liable to tax. The bonus is given in addition to the existing 400% tax deduction or allowances and/or 60% PIC Cash Payout. In order to get the bonus, the business has to make a claim for the above-mentioned deductions and/or cash payout.

The PIC Bonus is given so that the business can cope up with the increasing operating costs like wages and rents. The bonus ensures that the business can make significant improvements in the field of productivity and innovation, which will lead to the overall growth of the company. The amount of Bonus to be given out to a business is decided on the basis of the expenditure made by the company with PIC-qualifying activities.

Qualifying Conditions for Receiving the Bonus

Businesses qualified to receive the Bonus are generally partnerships, sole-proprietorships or companies. They have to satisfy a few essential conditions to receive the Bonus.

  • The business has to incur a minimum expenditure of $5,000 in PIC-qualifying activities in the period for the YA during which the bonus is claimed for.
  • It has to show active business undertakings in the place where the business is based.
  • The business has to show that it has at least 3 local employees excluding the stakeholders who might be directors of the company. A company is said to have satisfied the 3-employee condition if CPF has been contributed to the payroll for these employees. The CPF contributed should be such that 400% tax deduction/allowances and/or PIC cash payout on qualifying PIC expenditure has been claimed.

How is PIC Bonus Paid?

The businesses do not have to apply for getting the Bonus in cases, which include 400% tax deductions/allowances in the income in the tax returns. It is calculated for each YA by the concerned authorities from the cash payout application forms once the income tax return has been filed. The businesses generally receive the PIC Bonus within a maximum of three months from the time they had filed their tax returns and if the business has submitted all necessary details pertaining to the business. For partnerships and sole-proprietorships, a PIC Enhanced Allowances/Deduction Declaration Form for Sole-Proprietors and Partnerships has to be submitted along with the income tax returns.

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