An EPC is a private company which has at most 20 shareholders. No corporation holds (directly or indirectly) any beneficial interest in the EPC's shares.

Notwithstanding the filing of Annual Return to ACRA, an EPC must also file its Income Tax Return (Form C / Form C-S), accounts and tax computations to IRAS.

This is an EPC that does not have any accounting transactions or business activities for the financial year in question or have not commenced business since incorporation as defined under section 205B Companies Act.

This is an EPC whose annual revenue are more than S$5 million for financial year starting on or after 1 June 2004; or $2.5 million for financial year starting on or after 15 May 2003. Such EPC is not exempted from audit requirement.

Sole-proprietors and partnerships are not required to file accounts.

Yes. The office of secretary shall not be left vacant for more than 6 months at any one time.

Yes. However, a company which is exempted from audit requirements is not required to appoint an auditor.

It is not compulsory to amend the M&AA. However, you may engage a professional firm to examine if the M&AA contains any provisions that are inconsistent with having only one director and shareholder.

If the proposed name is found to be similar or identical to another name on the ACRA register, the name will be rejected.

Yes. The name will be available 15 years after the company has been struck off.

You would have to retain the exact business name for use in the company name. You would also have to undertake to terminate the business firm upon incorporation by indicating the business name and business registration number in the company name application form.

No, the name reservation period can only be extended if the application is submitted before the expiry date. A fee of $10 is payable and only one extension is allowed.

The company name is reserved for 60 days from the date of application. You will need to incorporate the company by the 60th day from the date of application.

You can either submit another name or appeal for the proposed name by stating a valid reason. The appeal will take approximately 3 working days for the outcome of the appeal to beknown. The appeal fee is $15 and this fee is non-refundable if the appeal is rejected.

You are only required to register the business name in English.

Yes, you can re-register the business using the same name. This is on condition that the previous owners of the business firm are the same owners of the new business firm.

Companies are required to hold an AGM in every calendar year, not more than 15 months from the preceding AGM and within 18 months from the date of its incorporation. - Section 175 (1)

Within one month after the AGM, the company must file its annual returns with ACRA. - Section 197 (4)

Financial statements laid at the AGM must be done up to a date not more than six months (for private limited companies) or four months (for public-listed companies) before the AGM. - Section 201 (1)

Companies must update ACRA on any changes to their registered office address. Any changes to the address should be lodged within 14 days. - Section 143 (1)

Companies are required to lodge with ACRA any changes to, or movement of, officers (resignation/new appointment), as well as their particulars within one month. - Section 173 (6)

Any director or officer of a company who has changed his residential address must inform ACRA within one month. - Section 173 (7)

Companies are to display the company’s name and registration number in legible romanised letters on all business letters, statements of accounts, invoices and other official documents. - Section 144

Company officers should not make or authorise false statements, or misleading information, in any official material. Wilful omission of information that may cause an official document to be misconstrued is also an offence. - Section 401 (2A)

Any person declared bankrupt cannot act as a director and manage the company directly or indirectly, except with the leave of the court or with the written permission of the official assignee. If a director faces such a disqualification, the company must lodge the director’s disqualification with ACRA within one month from the date the director was adjudged a bankrupt. Alternatively, he can lodge a notice of self-cessation as director. - Section 148

Businesses should not use the words “private”, “sendirian”, “limited” and “berhad” or in any way portray that the business is registered or incorporated as a company. - Section 405

All businesses are eligible for PIC, if they have incurred expenditure in any of the six qualifying activities.

Singapore registered branches and subsidiaries of a foreign parent or holding company are also eligible for PIC.

Investment holding companies do not qualify for PIC as they do not carry on a trade or business for tax purposes. These companies own investments such as properties and shares for long term investment and derive investment income such as dividend, interest or rental.

A service company is one which renders services to/on behalf of its related companies.

Service companies that derive arm’s length fees will qualify for PIC. These companies will need to prepare their tax computations under the normal tax rules. If a service company wishes to elect for cost plus mark-up basis of assessment, the company will not qualify for PIC. This is because an acceptance of mark-up as the chargeable income of the company is net of all available deductions and allowances (including PIC).

The PIC scheme is effective for eight years from YA 2011 to YA 2018.

The enhanced deductions/allowances under the PIC scheme is computed based on qualifying expenditure net of the grant or subsidy received.

For a GST-registered business, the qualifying cost incurred for the purpose of claiming PIC should exclude any GST that is claimable as input tax.

For a non-GST registered business, the GST component can be included as part of the qualifying cost.

Yes. Even though the income is taxed at concessionary rate, PIC will be applicable as long as the company incurs qualifying expenditure during the basis period for YA 2011 to YA 2018.

The existing record keeping requirements for businesses apply. You are required to maintain all the supporting documents such as invoices for a period of 5 years.

The purchase and leasing of PIC IT and Automation Equipment qualify for PIC.

The expenditure cap is applied to both expenditure incurred on acquisition and leasing of PIC IT and Automation Equipment.

If the installation costs (for example site preparation, delivery, assembly costs, etc) have been incurred as part of the costs of acquiring the equipment, they would qualify for PIC.

No. There is no need to make any application for the equipment to be considered as PIC IT and Automation Equipment. You can make a claim for PIC as long as the equipment falls within the PIC IT and Automation Equipment List.

We could assist to apply to IRAS to have your equipment approved for PIC.

Yes, you are still required to submit another application to have your new equipment approved for PIC even though IRAS had previously approved a similar equipment for PIC. This is necessary because each application is assessed based on whether the equipment met the criteria.

Yes, second-hand automation equipment will qualify for PIC.

The company will qualify for PIC benefits if the PIC IT and Automation Equipment is used by the company for the purpose of its trade or business.

Where the PIC IT and Automation Equipment is placed with an overseas subcontractor in an outsourcing arrangement for the purpose of providing manufacturing services to the company, the cost incurred by the company to purchase the equipment will qualify for PIC if:

- the equipment is used exclusively for the manufacture of the company’s products; and

- the company maintains control over the equipment used by the subcontractor (including maintenance of the equipment).

Yes. The lease payment incurred on PIC IT and Automation Equipment will qualify for PIC provided the equipment is not onward leased to another party during the same basis period.

Expenditure incurred in respect of equipment under a sale and lease-back arrangement would not qualify for enhanced deduction if capital allowance has previously been allowed for that equipment prior to the sale and lease-back arrangement.

Examples of automated kitchen equipment under item 22 include:

- Automatic deep fryer/noodle boiler/wok

- Automatic meat slicer

- Automatic packaging machine

- Blast chiller/freezer

- Combi oven

- Dishwasher

- Stone milling machine used to grind ingredients into paste/sauces

- Vacuum sealing machine

- Vegetable cutting/peeling machine

No. The list of equipment under item 35 is not restricted to the building and construction industry. As long as the equipment is listed under item 35 and used in the business (albeit not related to building and construction), it can qualify for PIC.

Examples of automated equipment under item 36 include:

- Carpet shampoo machine

- Push-behind or ride-on auto scrubber

- Ride-on sweeper

Yes, expenditure incurred on procuring cloud computing services will qualify for enhanced deduction for PIC purposes.

Payments for cloud computing are payments for services, withholding tax would apply if such payments are made to non-residents for services rendered in Singapore.

Yes, expenditure incurred on software upgrades qualifies for enhanced allowance.

Yes, expenditure incurred on leasing of office system software will qualify for enhanced deduction.

Payments for maintenance of software (e.g. debugging, helpdesk support) will not qualify for PIC. You can continue to claim deduction of such maintenance fees under the current rules.

If the software is developed for business use, enhanced allowance can be claimed on the development costs.

For website development costs:

From YA 2014 to YA 2018 - PIC benefits may be claimed on capital expenditure incurred on developing a website, including costs incurred for the one-time registration of a domain name for the website.

From YA 2011 to YA 2013 - Website development costs do not qualify for PIC benefits. However, if you are able to give a breakdown of the website development costs, PIC benefits may be granted on costs incurred for software application and hardware such as server, which are included in the PIC list.

For web hosting fees:

Fees paid for web hosting services do not qualify for PIC benefits. However, if you are able to provide a breakdown of the web hosting fees, PIC benefits may be granted on costs incurred for the acquisition/leasing of PIC IT and Automation Equipment such as software and server.

The qualifying training expenditure are:

a) Outsourced training – course fees paid to the external training service provider.

b) In-house training (conducted by the employees of the businesses) - expenditure incurred in relation to the provision of:

i) Workforce Skills Qualification (WSQ) training courses accredited by the Singapore Workforce Development Agency (WDA) and conducted by a WSQ in-house training provider;

ii) courses approved by the Institute of Technical Education (ITE) under the ITE Approved Training Centre scheme; or

iii) on-the-job training by an on-the-job training centre certified by ITE.

For YA 2012 to YA 2018, qualifying training expenditure incurred on in-house training not accredited by the Workforce Development Agency (WDA) or approved/certified by the Institute of Technical Education (ITE) will also qualify for enhanced deduction under PIC, subject to a cap of $10,000 for each YA. The claim must still be within the overall expenditure cap on training.

Some examples of internal training that may qualify for PIC without external certification are:

- Training on the operation of specialised equipment(s) with the help of instruction manuals;

- Training on a business’ operating processes and functions in a group setting, with prepared materials and handouts;

- Training to help develop necessary skill sets such as regular sessions on customer service.

Spontaneous consultation, day-to-day problem solving or meetings and coaching/mentoring sessions between supervisors and subordinates will not qualify for PIC.

The qualifying training costs include training cost incurred for training of all employees i.e. both local and foreign employees.

Yes, there is no restriction on where the training is conducted.

For external training courses, training fees paid to the external training provider qualify for the enhanced deduction under PIC. This includes registration or enrollment fees, examination fees, tuition fees and aptitude test fees. Rental expenses for external training premises, meal and refreshments provided during the courses, training materials and stationery separately incurred would also qualify for enhanced deduction under PIC.

However, expenses such as accommodation, travelling and transportation expenditure incurred by the employees attending the course will not qualify for PIC.

No, there is no need to deduct the Absentee Payroll funding to arrive at the qualifying expenditure for PIC. This is because the Absentee Payroll funding is given separately to help employers defray the manpower costs incurred on employees attending training.

Yes, expenses such as hotel accommodation, travelling (e.g. air fare) and transportation expenditure incurred by your business for the external trainer will qualify for PIC.

No, staff accommodation and travelling do not qualify for enhanced deduction. If there is no breakdown of the fees incurred, you may use the market rate for accommodation and airfare to compute the disallowable amount.

There is no specific requirement for the external trainer to be a certified trainer.

Your holding company is considered an external training service provider. Qualifying training expenses in relation to training of your employees will qualify for PIC.

The course fees paid to the external training service provider will qualify for the enhanced deduction under PIC.

There is no requirement that the employees have to pass the examination after the course.

From YA 2014 to YA 2018, examination fees with no training involved will qualify for PIC as long as there is an element of self-study on the employees’ part and the fees were incurred for the claimant’s trade or business.

Training fees incurred by a sole-proprietor/partner do not qualify for tax deduction under the PIC scheme as a sole proprietor/partner except for non-equity salaried partner*, is a business owner and not an employee. Such expenditure, being personal and private in nature, is not deductible as a business expense.

* A non-equity salaried partner who is under a contract of services is considered an employee.

From YA 2012 to YA 2018, qualifying training expenditure incurred on the following prescribed classes of individuals engaged by the business to carry on its trade will qualify for PIC:

- Salespersons registered under the Estate Agent Act;

- Representatives within the meaning of the Financial Advisers Act;

- Representatives within the meaning of the Securities and Futures Act; and

- Insurance agents of insurers licensed under the Insurance Act.

The scope of IPRs under PIC covers patents, copyrights, trademarks, registered designs, geographical indications, lay-out designs of integrated circuit, trade secrets or information with commercial value (excluding customer-based intangibles and documentation of work processes) and plant varieties.

To be eligible for WDA under PIC, the transferee (i.e. business that acquires the IPR) must acquire the legal and economic ownership of the IPR from the transferor (i.e. person who sells the IPR to the transferee). Legal ownership means the legal assignment of the IPR is granted to the transferee. Economic ownership means the future economic benefits attributable to the IPR will accrue to the transferee.

No. Sole-proprietorships do not qualify for claim of allowance under Section 19B of the Income Tax Act. Hence, the cash payout option is also not applicable to them.

No. The current tax treatment under Section 19B is for the costs of IPRs to be written down over 5 years.

Generally, enhanced WDA is granted on the full cost of the IPR. However, if the total expenditure incurred on the acquisition of the IPR exceeds the cap, you can claim enhanced WDA on the partial cost of one IPR.

However, if you opt to convert the qualifying expenditure into cash, partial conversion is not allowed and conversion has to be done on a “per IPR basis” up-front in the year of IPR acquisition on the full cost of the IPR.

No, the waiver is not applicable for acquisition of IPRs.

The qualifying IPRs are patents, copyrights, registered designs, geographical indications, lay-out designs of integrated circuits, trade secrets or information with commercial value (excluding customer-based intangibles and documentation of work processes) and plant varieties.

Qualifying costs are license fees incurred on the licensing of qualifying IPRs.

Expenditure incurred for the transfer of ownership of any those rights and legal fees and other incidental costs arising from the licensing of such rights will not qualify for PIC.

No. The licensee cannot claim PIC benefits if it licensed the IPR from a related party:

- who carries on a trade or business in Singapore; and

- the qualifying IPR is acquired or developed (in whole or in part) by the related party during the basis period relating to YA 2011 or any subsequent YA.

Registration cost is broadly divided into two categories, official fees and professional fees.

a) Official fees refers to payments made to the Registry of Patents, Registry of Trade Marks, Registry of Designs or the Registry of Plant Varieties in Singapore or elsewhere for:

i) filing of an application for a patent, registration of a trade mark or design, or for grant of the protection of a plant variety;

ii) search and examination report on the application for a patent;

iii) examination report on the application for grant of protection for a plant variety; or

iv) grant of a patent.

b) For Professional fees, it must be incurred in relation to the registration of the qualifying IPRs and will cover payments made to any person acting as an agent for:

i) applying for any patent, registration of a trade mark or design, or for the grant of protection of a plant variety, in Singapore or elsewhere;

ii) preparing specifications or other documents for the purpose of the Patents Act (Cap. 221), the Trade Marks Act (Cap. 332), the Registered Design Act (Cap. 266), the Plant varieties Protection Act (Cap. 232A) or the intellectual property law of any other country in respect of patents, trademarks, designs or plant varieties; or

iii) giving advice on the validity or infringement of any patent, trade mark, design or plant variety.

Yes. The enhanced deduction is granted regardless of the outcome of the application as long the business has incurred the registration cost.

No. Only the cost of registration allowable under Section 14A qualifies for enhanced deduction. Renewal cost for trademarks is an allowable deduction under Section 14(1) if it is wholly and exclusively incurred in the production of income.

You are required to hold the IPR for a minimum period of one year from the date of filing of the IPR.

No, the waiver of claw-back provision does not apply to registration or disposal of IPRs.

Under Section 2 of the Income Tax Act, R&D means any systematic, investigative and experimental study that involves novelty or technical risk carried out in the field of science or technology with the object of acquiring new knowledge or using the results of the study for the production or improvement of materials, devices, products, produce, or processes, but does not include —

- quality control or routine testing of materials, devices or products;

- research in the social sciences or the humanities;

- routine data collection;

- efficiency surveys or management studies;

- market research or sales promotion;

- routine modifications or changes to materials, devices, products, processes or production methods;

- cosmetic modifications or stylistic changes to materials, devices, products, processes or production methods; or

- (Not applicable from YA 2012 onward) development of a computer software that is not intended to be sold, rented, leased, licensed or hired to 2 or more persons who are not related parties to each other and to the person who develops the software or on whose behalf the development of the software is undertaken.

The cap is on the total amount incurred on qualifying R&D expenditure for the YA regardless of the number of projects handled by the business.

The qualifying R&D expenditure for the purpose of claiming enhanced tax deduction under PIC are R&D expenditure incurred on R&D projects carried out in Singapore or overseas, if the R&D done overseas relates to the taxpayer’s Singapore trade or business.

Qualifying expenditure refer to staff costs, consumables and any such expenditure prescribed by the Minister. The R&D expenditure also has to be computed net of subsidy and grant received from the Government or statutory board.

Consumables refer to any materials or items used in the research and development which, upon such use, are consumed or transformed in such a manner that they are no longer useable in their original form.

Consumables exclude utilities.

For out-sourced R&D activities, 60% of the total payments made to the R&D organisation will be deemed as qualifying staff costs and consumables allowed for enhanced deduction.

Where more than 60% of such payments are made up of staff costs and consumables, enhanced deduction based on the actual percentage of staff costs and consumables incurred is allowed.

To support small but growing businesses which may be cash-constrained in innovating and improving productivity, eligible businesses can opt to convert qualifying expenditure to a non- taxable cash payout subject to a cap (cash payout cap) as follows:

- For YA 2011 to YA 2012 – $200,000 over 2 YAs combined at Cash Payout Rate of 30% (Maximum Payout is $60,000 over 2 YAs)

- For YA 2013 to YA 2018 – $100,000 per YA at Cash Payout Rate of 60% (Maximum Payout is $60,000 per YA)

The cash payout option is available from YA 2011 to YA 2018.

For sole-proprietorships and companies (including registered business trusts), the cap is applied at the individual or company level; for partnerships, the cap is applied at the partnership level.

For YA 2011 and YA2012, you can convert qualifying expenditure up to $200,000 (but not less than $400 for each YA) taken together for the 2 YAs at the rate of 30% for all six qualifying activities. The total cash payout is $60,000 for two YAs combined.

For YA 2013 to YA 2018, you can convert qualifying expenditure up to a cap of $100,000 for each YA (but not less than $400) for all six qualifying activities taken together at the cash conversion rate of 60%. The total cash payout is $60,000 for each YA.

Sole-proprietorships, partnerships and companies (including registered business trusts) are eligible as long as they:

i) incurred the qualifying expenditure and are entitled to PIC during the basis period for the qualifying YA;

ii) have active business operations in Singapore; and

iii) employ at least 3 local employees (Singapore Citizens or Permanent Residents with CPF contributions) excluding sole-proprietors, partners under contracts for service and shareholders who are directors of the company.

No. PIC cash payout is given on qualifying expenditure incurred during the basis period of the YA and business must have 3 local employees during the relevant month(s) of the YA.

No, these contributions do not need to be made for all 12 months of the YA. To qualify for the cash payout, businesses must have contributed CPF on the payroll of at least 3 local employees as follows:

- For YA 2011 to YA 2012 – In the last month of the basis period for the qualifying YA.

- For YA 2013 to YA 2015 – In the last month of the quarter or combined consecutive quarters to which the cash payout option relates.

- For YA 2016 to YA 2018 – For all three months in the quarter or last three months of the combined consecutive quarters to which the cash payout option relates.

Only employees who are Singaporeans and Permanent Residents will be considered when determining the number of qualifying local employees. Your non-Singaporean employees will not be taken into consideration.

Both full-time and part-time employees who are Singaporeans and Permanent Residents will be considered when determining the number of qualifying local employees.

The following groups of people are excluded when determining the number of qualifying employees for the purpose of cash payout:

- Self-employed (this includes a sole proprietor and partner under contract for service)

- Shareholder who is also a Director of the company (as defined in Section 4(1) of the Companies Act).

No. As you are self-employed, you are the owner of the business and thus cannot be considered as an employee of the business. The eligibility of a business to claim the cash payout is based on the number of employees who are not business owners.

No, the cash payout is not taxable.

Yes. However the qualifying expenditure available for computing enhanced allowances/ deductions will have to exclude the qualifying expenditure elected to be converted into a cash payout.

Partial conversion is allowed for qualifying expenditure relating to leasing of PIC IT and Automation Equipment, in-licensing of qualifying IPRs, training, design project and research and development.

Partial conversion is not allowed for qualifying expenditure relating to purchase of PIC IT and Automation Equipment, registration and acquisition of IPRs.

YA 2012 to YA 2018 - Businesses can opt for cash payout on assets purchased under HP agreements signed during the basis period for YA 2012 to YA 2018, with repayment schedule straddling two or more financial years.

To qualify for cash payout, the business must contribute CPF on the payroll of at least 3 local employees:

- For YA 2012 – in the last month of the basis period in which the hire purchase agreement is signed.

- For YA 2013 to YA 2015 – in the last month of the quarter or combined consecutive quarters in which the hire purchase agreement is signed.

- For YA 2016 to YA 2018 – for all three months in the quarter or last three months of the combined consecutive quarters in which the hire purchase agreement is signed.

YA 2011 - The cash payout option is not available for assets purchased under HP agreements (with repayment schedule straddling two or more basis periods) signed during the basis period for YA 2011.

No. Once you have elected to convert the qualifying expenditure into a cash payout, you cannot claim tax deductions or allowances on the encashed expenditure.

Businesses can apply for the cash payout after the end of any financial quarter(s) in the business’ financial year, but no later than the filing due date of the income tax return for each YA.

From YA 2013, businesses can apply for cash payout on a quarterly or combined consecutive quarters basis. This means that you can apply for cash payout by submitting the PIC Cash Payout Application Form anytime after the end of your financial quarter(s), but not later than the income tax return filing due date of the relevant YA (15 Apr for sole-proprietorship and partnership; 30 Nov for company).

You do not need to submit the PIC Cash Payout Application Form together with your company’s ECI. If you are claiming the enhanced tax deductions or allowances under PIC, the claim should be made in the tax computation for the relevant YA.

No, only the hard copy of the original form, signed by the authorised person and sent to IRAS, will be accepted.

You only need to submit one claim form for all your sole-proprietorships as the cash payout is capped at the sole-proprietor level.

You will receive the cash payout within 3 months from the date IRAS receives the completed PIC Cash Payout Application form and the relevant documents.

You are required to own the automation equipment and/or IPRs for which the cash payout has been made, for at least 1 year from the date of acquisition of the automation equipment; or acquisition of the IPR; or filing of the IPR (whichever is applicable).

If you lease/dispose of your acquired IPRs within two to five years, you will need to repay the cash payout proportionately.

Besides the recovery of cash payout, no penalty will be imposed if you inform IRAS of the disposal within 30 days from the date the equipment is disposed. However, penalties will be imposed for late notification and non-compliance.

The PIC+ scheme is available from Year of Assessment (YA) 2015 to YA 2018.

Under the PIC+ scheme, qualifying SMEs that incur PIC qualifying expenditure beyond the current combined expenditure cap of $1.2 million per activity from YA 2013 to YA 2015 and from YA 2016 to YA 2018 can enjoy enhanced tax deductions/allowances on an additional $200,000 in expenditure (“additional qualifying expenditure”) for each qualifying activity per YA. This brings the expenditure cap for qualifying SMEs from $400,000 to $600,000 for each qualifying activity per YA.

No, the expenditure cap for PIC cash payout remains unchanged at $100,000 for all six activities per YA.

Yes. The additional qualifying expenditure under the PIC+ scheme can be converted into cash, subject to the existing conditions for making a PIC cash payout claim.

Any deduction/allowance that cannot be fully utilised in any YA will form part of the unutilised trade losses/allowances of the business.

The unutilised trade losses/allowances can be offset against other income of the business. These unutilised trade losses/allowances can also be:

- Carried forward to offset against the business income of future YAs subject to the shareholding test and business continuity test as per current tax rules;

- Carried back to the immediate preceding YA to offset against the prior year income under the loss carry-back relief system;

- Transferred to and offset against the income of a related Singapore company under the group relief system.

SMEs qualifying for the PIC+ scheme are sole-proprietorships, partnerships and companies that are carrying on trade or business. They must also meet the following conditions:

If the business is part of a group:

- Group revenue of not more than $100 million for the relevant basis period for the YA (“revenue” condition); or

- Group employment size of not more than 200 employees as at the last day of the relevant basis period (“employment size” condition).

If the business is not part of a group:

- Revenue of not more than $100 million for the relevant basis period for the YA (“revenue” condition); or

- Employment size of not more than 200 employees as at the last day of the relevant basis period (“employment size” condition).

Sole-Proprietor/Partnership:

Where the owner of the sole-proprietor or controlling partner of the partnership is an individual, the PIC+ eligibility criteria will be applied:

- In the case of a sole-proprietor – at the individual level by aggregating all the sole- proprietorship businesses carried on by that individual

- In the case of a partnership – at the partnership level.

Singapore Branch:

A head office together with all its branches form a single legal entity. For a Singapore branch to qualify for PIC+, the combined revenue of the head office and all its branches must not exceed $100 million or the combined employment size of the head office and all its branches must not exceed 200 employees. The criteria will be applied at the group level if the head office is part of a group.

The PIC+ expenditure cap is combined for YA 2013 to YA 2015, and for YA 2016 to YA 2018.

For YA 2015, the business must meet the “revenue” or “employment size” condition in YA 2015.

For YA 2016 to YA 2018, once your business meets the “revenue” or “employment size” condition in any of the YAs, your business will be able to enjoy the tax benefits under PIC+ from that YA onwards, even if it fails to meet the eligibility criteria in subsequent YAs.

Yes, you have the option of electing for PIC cash payout on a quarter or combined consecutive quarter(s) basis, as per existing rules. However, if at the point of election, you are unable to determine whether your business meets the PIC+ eligibility criteria, the PIC cash payout election can only be made after confirmation of your PIC+ eligibility.

Yes, you can continue to claim for the existing tax benefits under the PIC scheme:

Enhanced deductions/allowances on up to $400,000 of qualifying expenditure for each activity per YA. The annual expenditure cap of $400,000 may be combined as follows:

For YA 2013 to YA 2015 combined – $1,200,000 for each qualifying activity.

For YA 2016 to YA 2018 combined – $1,200,000 for each qualifying activity.

Convert up to $100,000 of qualifying expenditure in all six activities per YA into a cash payout.

No. There is no need to seek prior approval from IRAS.

There is no need to submit a separate application for PIC+.

No, these contributions do not need to be made back-to-back on consecutive months for the entire YA. To qualify for the PIC Bonus, businesses must have contributed CPF on the payroll of at least 3 local employees:

- Where 400% tax deductions/allowances on qualifying PIC expenditure is claimed – in the last month of the basis period for the YA to which the deduction/allowance relates.

- Where PIC cash payout on qualifying PIC expenditure is claimed – in the last month of the quarter or combined consecutive quarters to which the cash payout option relates.

Only employees who are Singaporeans and Permanent Residents will be considered when determining the number of qualifying local employees. Your non-Singaporean employees will not be taken into consideration.

Both full-time and part-time employees who are Singaporeans and Permanent Residents will be considered when determining the number of qualifying local employees.

The following groups of people are excluded when determining the number of qualifying employees for the purpose of the PIC Bonus as they are business owners:

- Self-employed (this includes a sole proprietor and partner under contract for service)

- Shareholder who is also a director of the company (as defined in Section 4(1) of the Companies Act).

Under the PIC scheme, all taxpaying entities can claim 400% tax deductions/allowances on PIC qualifying expenditure. The cash conversion option is however available only to companies, partnerships and sole proprietorships with at least 3 local employees.

No, companies are not eligible for PIC Bonus if they have ceased business operations at the point IRAS processes their PIC Bonus.

The PIC Bonus is given on a dollar-for-dollar matching basis. This means that for every dollar your business spends on PIC-qualifying activities, your business will receive a PIC Bonus of a dollar, subject to a cap of $15,000 in total for YAs 2013 to 2015.

The number of times businesses can seek claims on the PIC Bonus is:

- Once a year if 400% tax deductions/allowances is claimed; and

- Up to four times a year if PIC cash payout is claimed.

No, there are no restrictions on how you can use the PIC Bonus.

PIC Bonus is computed based on the principal sum repaid (the amount that qualifies for PIC benefits) during the basis periods relating to YA 2013, YA 2014 and YA 2015.

No, PIC Bonus will not be granted on instalment payments made after the basis period relating to YA 2015.

Yes. PIC Bonus is granted on top of existing PIC benefits. If the business is no longer eligible for PIC as conditions for granting the benefits are not met (such as the one-year minimum holding requirement for acquisition of PIC IT and automation equipment), the business would likewise not be allowed to keep the PIC Bonus.

Withholding tax is applicable to payment of income made to a foreign individual in his capacity as a non-resident director . For payment of income made to the foreign individual in his capacity as an executive director , the withholding tax procedure is not applicable. Instead, the executive director must report his income in the income tax return.

Yes, such payments are taxable regardless of his physical presence in Singapore as he has been paid the director’s fee.

Yes, the director’s fees would still be subject to withholding tax.

The full amount of remuneration is subject to withholding tax.

The full amount of director’s remuneration is subject to withholding tax, regardless the place of payment.

Whether he is liable to tax in Singapore would depend on the provisions in the tax treaty. Generally, director's fees derived from a company incorporated in Singapore is taxable in Singapore.

No, he will not be liable to Singapore income tax on the director’s fees paid by the foreign company with no presence in Singapore. The foreign company is not considered to have a presence in Singapore through a subsidiary in Singapore.

Yes, he will be liable to Singapore income tax on the director's fees paid by the foreign company as the foreign company is considered to have a presence in Singapore through a branch in Singapore.

The date of payment is the date they are voted and approved at the company’s Annual General Meeting.

No, since the employer has accounted for the withholding tax. The non-resident director must file an income tax return if he has other sources of income.

Yes. You must withhold tax on the fees paid to the consultant for professional services rendered in Singapore. It does not matter where the consultant is paid.

The tax exemption for short-term employment of 60 days or less does not apply to visiting non-resident professionals who exercise their profession in Singapore. Only visiting non-resident professionals who are employees would qualify for the exemption.

Under the 15% withholding tax treatment, the cost of accommodation (regardless of number of days) and airfare are subject to withholding tax at 15%. Under the option to be taxed at 20% of net income, the cost of accommodation (less than 60 days per year) and airfare are not taxable as a concession.

They are liable to Singapore income tax on the per diem, airfare and hotel accommodation provided to you. If their stay in Singapore is 60 days or less in a calendar year, they may elect to be taxed at 20% of net income. Under this option, the airfare and accommodation provided are not taxable as a concession. You only needs to withhold tax at 20% on the amount of per diem paid.

No, you do not need to withhold tax on fee paid for services rendered outside Singapore.

The professional fees is subject to withholding tax. As the retainer fees are not income attributable to services performed outside Singapore, it is also subject to withholding tax in Singapore.

Yes, withholding tax is applicable. This is notwithstanding that the interest charged on the goods sold on credit is incidental to the main activity of selling the products.

If there was only one loan agreement and the Singapore-resident company was not a party to the agreement, i.e., it merely acted as an intermediary, withholding tax is not applicable. However, if there were two separate loan agreements, withholding tax is applicable on the interest payable to the non-resident company since it was borne by a person resident in Singapore.

No, since it is in respect of a business carried on outside Singapore through a permanent establishment outside Singapore. This is provided that the interest is not deductible against any income accruing in or derived from Singapore.

No, since the loan is in respect of an immovable property situated outside Singapore.

Under the rights-based approach, payments for the use of software characterised as a copyrighted article are not subject to withholding tax. Payments to non-residents for the use of software chararacterised as a copyright right are subject to withholding tax.

If the software is used by the company for its business operations and the company is not allowed to commercially exploit the copyright of the software, the payment is for a copyrighted article. Withholding tax is not applicable.

If the payment allows the company to commercially exploit the copyright of the software, the payment is for a copyright right and is a royalty. Withholding tax is applicable for payments to non-residents.

The withholding tax rate is 10% or such reduced rate as provided under a tax treaty.

Withholding tax is applicable if the services are performed in Singapore. However, if the services are rendered outside Singapore, withholding tax is not applicable.

Withholding tax is not required on the portion relating to the purchase of hardware and equipment.

For tax purposes, the branch and head office are treated as separate entities. The Singapore branch has to withhold tax.

Withholding tax is applicable on the service fees attributable to work done in Singapore. The withholding tax is at the prevailing corporate tax rate on the gross fees. This is not the final tax. If the company wishes to claim for the expenses incurred, they may forward the certified accounts and tax computation for IRAS' examination. When the net income and tax have been determined, any tax withheld in excess of the tax on the net income will be refunded.

Withholding tax is applicable unless the payer can obtain a detailed breakdown of the expenses showing that the expenses were reimbursed at the actual costs incurred, without any mark-up or profit element.

Services provided by a non-resident company via electronic means overseas without sending staff to Singapore are considered as services rendered outside Singapore. As such, withholding tax is not applicable.

No. Withholding tax is not applicable to reimbursement/allocation of management fees (without profit element) between a head office and branches under a cost-pooling arrangement.

The rental from letting of furniture and fittings is considered as rental for the use of movable property and thus, you are required to withhold tax at the rate of 15%.

Singapore currently does not have withholding tax on dividend although withholding tax rates on dividends are provided under the tax treaties.