PIC Plus Scheme for SMEs
The PIC+ Scheme was introduced by the government of Singapore when the 2014 budget was read. The scheme has been set up to assist SMEs that are committed to pouring money into various activities that can transform their business. The requirement to benefit from this scheme is to ensure that the SME has spent a minimum of $1,200,000 for the years of assessment 2013 to 2015 combined. Due to its high demand, this incentive has also been extended to the years 2016 to 2018.
Like all other PIC scheme incentives, the amount must have been spent on activities that have been listed under the six qualifying activities of the scheme. Whereas the PIC Scheme gives a 400% tax deduction on $400,000, the PIC Plus Scheme gives the same percentage deductions on an extra $200,000 bringing the total to $600,000. This is granted for each activity that qualifies for each year of assessment.
Is your Organization Eligible?
To be eligible for these tax benefits here are the requirements:
- The business will need to be registered as a partnership, sole proprietorship or a company.
- If it is registered as a company the following criterion must be met:
o It should have less than 200 workers o It should not make more than $100,000 million in revenue.
- In the case of a company that falls under a group of companies, the above criterion will be applied to the group as a whole in order to see if it qualifies.
Doing the Math!
This benefit kicks in from the year of assessment 2015. If one is doing the math for the three years starting from 2013 to 2015, then the initial year will be calculated at the initial rate of 400% of $400,000. The other two years, however, will be calculated at 400% of $600,000. Thereby, calculating the final
total to be $1,400,000. As such, the math will look as follows:
$1,400,000 X 400% = $5,600,000
The following three years are easier to calculate because the rate will be 400% of $600,000 for each year. In the three years, 2016 to 2018 the total cap will then reach $1,800,000. This will give the following tax deduction:
$1,800,000 X 400% = $7,200,000
In addition to this, the SME can still convert $100,000 of its total expenditure into a cash payout at 60%. If you need help with making your calculations and figuring out how much is owed to you, then the consultants you engage can assist. They will also help you figure out if you are eligible for the PIC+Scheme.
Making a Claim
In order to make a claim the following must be adhered to:
- The eligibility criterion mentioned above must be adhered to if a claim is to be made for YA 2015.
- For YA 2016 to YA 2018 the company will simply need to prove that it met the criteria in the year 2015 in order to be eligible. This means that regardless of whether or not it meets the criteria in the years 2016 – 2018 it will remain eligible by virtue of meeting the said criteria in YA 2015. This will be so unless the parent company of particular business changes.