Income Tax – False PIC Claim by a Singapore Company and its Director


It was reported in IRAS’ website on 31 May 2016 that Parade Industries Pte. Ltd. (“PIPL”) and its director, Lim Beng Gwek, have been convicted of providing false information in the company’s Productivity and Innovation Credit (“PIC”) cash payout application form.

IRAS’ investigation revealed that PIPL,  a manufacturing company that produces plastic packaging products, made a PIC cash payout claim for the purchase of an automatic vacuum forming machine at a cost of $103,000 in the Year of Assessment (“YA”) 2014.  However,  the machine was in fact purchased by PIPL in 1999. Lim had signed PIPL’s PIC cash payout application form which falsely reflected that PIPL had purchased the machine in YA 2014 to claim $60,000 of PIC cash payout on behalf of Parade Industries.

PIPL was convicted of giving false information to the Comptroller of Income Tax, in order to obtain a PIC cash payout which it was not entitled to. The court ordered PIPL to pay a penalty of $180,000,  which is 3X the amount of the PIC cash payout that was wrongfully obtained, and a fine of $10,000.

In addition, Lim was convicted of giving false information without reasonable excuse to the Comptroller to assist PIPL  to obtain a PIC cash payout, which PIPL was not entitled to. The court ordered Lim to pay a penalty of $120,000, which is 2X the amount of PIC cash payout that was wrongfully obtained, and a fine of $4,000.

What does this mean to you? 

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government.  Offenders convicted of PIC abuse will have to pay a penalty of up to 4X the amount of PIC cash payout fraudulently obtained or which would have been obtained if the offence had not been detected, and a fine of up to $10,000 and/or imprisonment of up to five years.

If you have any questions, please contact support @whm-consulting.com.

 

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