A sole proprietor of a business was recently charged and convicted for submitting false information in order to obtain a Productivity and Innovation Credit (PIC) cash payout of $9,000 for her business.
She had submitted an application for a PIC cash payout in 2013, with a false declaration that her business had met the condition of having three local employee during the period of her claims. However, IRAS’ investigations revealed that she had worked on her own with no employees. She had falsely use the names of her acquaintances, to fulfil the three local employees conditions, even though they were not working for her.
She was charged and convicted for wilfully with intent to obtain a PIC cash payout by providing false information in the PIC cash payout application form. Upon conviction, she was ordered by the court to pay a penalty of $27,000, three times the amount of the cash payout that had been wrongfully obtained, and a fine of $10,000.
This case highlights the importance for business owners to ensure that their business fulfil the “three-local employee” condition if they wish to apply for PIC cash payout. This condition requires the business to have at least three local employees (Singapore Citizens or Singapore Permanent Residents with Central Provident Fund (CPF) contributions) excluding sole-proprietors, partners under contract for service and shareholders who are directors of the company.
Besides from meeting this “three-local-employee” condition, businesses have to also make sure that they incurred the PIC qualified expenditure, have active business operations and the PIC equipment is actually in use for the business.