It was reported in IRAS’ website on 19 September 2013 that a company director was sentenced to jail for 8 weeks for claiming the Productivity and Innovation Credit (“PIC“) cash payout of approximately S$58,000 fraudulently for his company. This is the first prosecution case since the PIC scheme was introduced in Singapore in 2010.
Mr. Khoo Tzyh Shin, a director of Greenit Pte Ltd (“the Company“) 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 to which the Company was not entitled to. Mr. Khoo was ordered by the court to pay a penalty of approximately S$232,000 for his offence.
The Court also ordered the company to pay a fine of $10,000 and a penalty of approximately $232,000, which is 4 times the amount of cash payout that it had fraudulently claimed.
What does this mean to you?
How IRAS was able to prosecute Mr. Khoo and the Company was the result of tax investigation. IRAS found that Mr. Khoo falsified invoices and declared a sum of S$193,000 as qualifying expenditure for the purpose of the cash payout under the PIC scheme. However, the investigation revealed that the Company did not incur the purported expenditure and thus it was not entitled to the cash payout in the first place.
You are thus advised to make the PIC Scheme properly. IRAS takes a serious view of taxpayers who defraud the Government. Offenders will have to pay a penalty up to 4 times the amount of cash payout fraudulently obtained, and a fine of up to $50,000 and/or imprisonment of up to 5 years.
Please let your comments or questions below and we would be pleased to clarify further.