Eligible businesses can apply to convert up to $100,000 of their total expenditure in all the six qualifying activities into a non-taxable cash payout.
The cash payout option is to support small and growing businesses which may be cash-constrained to innovate and improve productivity.
The maximum cash payout is calculated as follows:
|Year of Assessment (YA)||Expenditure Cap for All Qualifying Activities||Conversion Rate||Maximum Cash Payout|
2011 and 2012
2013 to 2015
$100,000 per YA
$60,000 per YA
Conditions for cash payout
Businesses eligible to apply for the cash payout are sole-proprietorships, partnerships, companies (including registered business trusts) that have:
- incurred qualifying expenditure and are entitled to PIC during the basis period for the qualifying YA;
- active business operations in Singapore; and
- at least 3 local employees (Singapore citizens or Singapore permanent residents with CPF contributions) excluding sole-proprietors, partners under contract for service and shareholders who are directors of the company.
A business is considered to have met the 3-local-employees condition if it contributes CPF on the payroll of at least 3 local employees in the relevant month.
What to note when applying for cash payout
- Once the qualifying expenditure is converted to cash, it cannot be claimed as tax deduction/allowances.
- Election to convert qualifying expenditure to cash is irrevocable.
- The minimum qualifying expenditure for each application is $400.
- Qualifying expenditure to be converted to cash is the amount net of grant or subsidy by the Government or any statutory board, and includes grant or subsidy pending approval.