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9 Mar 2014

Top 11 Misunderstandings about PIC

Feedback from my 8 articles on PIC and PIC Training revealed that many people, including top management and consultants, have mis-understandings about PIC.  Such mis-understandings arise because of misreading IRAS, hearsay from uninformed people and plain ignorance.   If you allow such misunderstandings to affect your career and business, you will lose as much as $375,000 cash over 6 years.  The top 11 misunderstandings are:
  1. PIC is only for Singapore companies.  100% foreign owned companies, like the Singapore Branch of Bank of China, are not eligible.  Truth: All businesses are eligible for PIC as long as they have 3 local (Singaporeans and Singapore PRs) staff on their payroll with CPF.  Note that the '3 local staff' here EXCLUDES the directors, shareholders and proprietors of the business
  2. PIC is going to expire in 2015.  Truth: PIC is expiring in 2017 (Y/A 2018)
  3. You cannot claim PIC for Training for foreigners and staff that are not on CPF.  Truth: All employees, full time and part-time, including employees on commission (like taxi drivers and real estate agents) are covered for PIC Training
  4. Mobile phones and i-Pads cannot claim PIC. Truth: All mobile phones and tablets are eligible, including those non-smart phones like the old Nokia phones.
  5. You need a consultant to claim PIC for you if you want to get money fast.  Truth: It only takes 11 minutes for you to fill up the form, and even kids know how to do the paperwork easily
  6. The Government will, after paying you PIC money, take money back from you.  Truth: This is true for PIC Bonus, where you have to pay tax on it.  PIC cash payouts are not taxable.
  7. Websites, including domain names registration, are not claimable.  Truth: With effect from 2014, they are all claimable.
  8. You need to submit original or photocopied invoices to support your claim.  Truth: you only submit documents upon request.
  9. E-filing of PIC is faster.  Truth: no such thing, all PIC claims are to be done manually and submitted on paper
  10. PIC does not benefit big companies. PIC does not distinguish between big and small companies as they all enjoy the same entitlements: claim 60% cash or 300% tax deduction on 9 types of spending: External Training, Internal Training (up to $10,00 0 yearly), IT Hardware, Software, Websites, Automation Equipment, R & D, Intellectual Property Rights and Singapore Design Council projects
  11. If you enjoy subsidies by other government schemes, like WSQ or iSPRINT, you cannot claim PIC for such expenditure.  Truth: PIC is claimable for the balancing amount not covered by such schemes.  For example, iSPRINT gives you 70% grant on IT projects, you can easily claim PIC 60% cash payout for the balancing 30% not covered by iSPRINT.

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