Fraudulent PIC Claim
Please do not try to be “creative” in order to claim your PIC, it’s not worth it !
IRAS takes a serious view of taxpayers who defraud the government.
Offenders convicted of PIC fraud will have to pay a penalty of up to 4 times the amount of cash payout fraudulently obtained, & a fine of up to $50,000 &/or imprisonment of up to 5 years.
Recent examples of what IRAS regards as abuse of the PIC scheme are as follows:
* Claiming PIC using false records or documents, where no such expenditure was incurred or where the actual amount incurred was lower.
* Creating a shell company to make PIC claims on purchase of equipment from a related company, where no such purchases were made & where the automation equipment continue to be owned & used by the related company.
* Claiming PIC based on collusion with a 3rd party to purchase automation equipment, when the selling party is not the legal owner of the equipment & was merely renting or leasing it.
* Using phantom employees to meet the PIC qualifying condition of having made CPF contributions for three or more local employees.
* Engaging in arrangements that seek to artificially inflate PIC claims such as purchase/lease arrangements bundled with non-qualifying costs (for example, offering a high cash back for trade-in of an old asset).
* Artificially inflating the staff cost allocated to software development.
Sharing a case of a Company Director Jailed for Fraudulent PIC Claims :
A company director was sentenced to 8 weeks’ jail for fraudulently claiming a Productivity and Innovation Credit (PIC) cash payout of $58,143.60 for his company. This is the first PIC prosecution case since the scheme was introduced in 2010.
Mr Khoo Tzyh Shin (“Khoo”, 34) is a Director of Greenit Pte Ltd – a computer equipment and hardware wholesaler and computer memory modules distributor. He is the first director to be charged under section 37J(4)(b) of the Income Tax Act for wilful intent to assist a company in fraud, by obtaining a cash payout which it was not entitled to. Khoo was ordered by the court to pay a penalty of $232,574.40 for the crime.
The court also ordered Greenit Pte Ltd (“Greenit”) to pay a fine of $10,000 and a penalty of $232,574.40. The penalty is four times the amount of cash payout that it had fraudulently claimed.
Hope above explains.
Don’t be “creative” with PIC claims !
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