{"id":181,"date":"2015-10-14T10:29:26","date_gmt":"2015-10-14T02:29:26","guid":{"rendered":"http:\/\/www.taxmadeeasy.sg\/?p=181"},"modified":"2020-08-19T16:48:19","modified_gmt":"2020-08-19T08:48:19","slug":"pic-cash-payout-part-1","status":"publish","type":"post","link":"https:\/\/www.taxmadeeasy.sg\/pic-cash-payout-part-1\/","title":{"rendered":"PIC Cash payout (Part 1)"},"content":{"rendered":"

Although the PIC scheme offer 2 option for the taxpayers to elect on their qualifying expenditures, the most common and popular choice that most SMEs would go are the PIC cash payout option.<\/p>\n

<\/p>\n

One of the main reason is that it gives SMEs cash back on their qualifying purchases. \u00a0For SMEs, liquidity forms a major part for business continuity.<\/p>\n

In this and the next blog posts, I will explain in more details on:<\/p>\n

    \n
  1. How does the cash payout works;<\/li>\n
  2. Maximum cash back for each business year;<\/li>\n
  3. Steps to apply for the cash payout;<\/li>\n
  4. Qualifying conditions; and<\/li>\n
  5. Impact to your company’s tax payable<\/li>\n<\/ol>\n

    How does cash payout work<\/u><\/p>\n

    As mentioned briefly in my previous article, when your company has incurred expenses on PIC qualifying items (e.g. bought a laptop, rental of multifunctional copier machine or send your employee to training), you can elect to convert these expenses into cash.<\/p>\n

    Example<\/p>\n

    FGH Pte Ltd rents a multi-functional copier for S$5,000 per annum.<\/p>\n

    It can choose to elect to convert the full S$5,000 into cash payout of S$3,000 under the PIC cash payout option. (S$5,000 x 60%*).<\/p>\n

    What is the maximum amount my company can receive for each business year?<\/u><\/p>\n

    The maximum qualifying expenditure that companies can elect to claim cash payout on is S$100,000. This means that the maximum cash you can get from electing the cash payout is S$60,000 (S$100,000 x 60%*) for each business year.<\/p>\n

    As mentioned previously, the capping for each qualifying activity is S$400,000 or S$1,200,000 for a combined period of 3 business years.<\/p>\n

    Companies can still elect to claim PIC enhanced deduction on the remaining qualifying activities of up to S$1,100,000 (combined capping).<\/p>\n

    *W.e.f 1 August 2016, the PIC cash payout rate is adjusted to 40%<\/p>\n","protected":false},"excerpt":{"rendered":"

    Although the PIC scheme offer 2 option for the taxpayers to elect on their qualifying expenditures, the most common and popular choice that most SMEs would go are the PIC cash payout option.<\/p>\n","protected":false},"author":1,"featured_media":183,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\n\n\t\n