Expiry of PIC Scheme after YA 2018 - How to determine the dates of the expenditure incurred for claiming PIC Cash Payout


The PIC scheme has benefited many businesses since its introduction and has been instrumental in kick-starting the productivity drive. As announced in Budget 2016, the PIC scheme has lapsed after the Year of Assessment (YA) 2018. However, businesses may continue to enjoy 100% deductions/ allowances on the expenditure incurred subject to existing tax rules.

Businesses may elect for cash payout on qualifying expenditure incurred in the basis period of YA 2018. The eligibility for PIC is determined based on the date when the expenditure is incurred and not the date of submission of the cash payout application. You can submit your cash payout claim any time after the end of your financial quarter, but not later than the Income Tax Return filing due date for YA 2018.

Determining the basis period for YA 2018

To qualify for PIC, businesses must incur the expenditure by the last day of the basis period of YA 2018. Any expenditure incurred after this date will not qualify for PIC benefits.

The following examples illustrate the last day to incur the PIC qualifying expenditure and to e-File PIC cash payout application for YA 2018.

Financial Year EndBasis Period for YA 2018YA Last day to incur qualifying expenditure
30 Jun1 Jul 2016 - 30 Jun 2017 2018 30 Jun 2017
30 Sep1 Oct 2016 - 30 Sep 2017 2018 30 Sep 2017
31 Dec1 Jan 2017 - 31 Dec 2017 2018 31 Dec 2017

 The last day to e-FIle PIC cash payout application for YA 2018 is:

  • For companies: 30 Nov 2018 (if paper file Income Tax Return) or 15 Dec 2018 (if e-File)
  • For sole-proprietors/ partnerships: 15 Apr 2018 (if paper file Income Tax Return) or 18 Apr 2018 (if e-File)

Determining when expenditure is incurred for PIC cash payout purposes

PIC Cash Payout is disbursed only when the qualifying expenditure has been incurred by the business. An expense is incurred when the legal liability to pay has arisen, regardless of the date of actual payment of the money. 

The following examples illustrate when an expenditure is considered incurred for the purpose of the expiry of the PIC scheme after YA 2018. These examples are drawn up based on common scenarios and queries we have encountered, particularly in the claims for PIC Cash Payout.

In all the following examples, the financial year end of the business is assumed to be 31 Dec.

Your company purchased a copier machine on 1 Dec 2017 and the terms in the sales invoice provided for cash-on-delivery. Full payment was made on 1 Dec 2017 but the copier was only delivered on 15 Jan 2018.

In this case, the legal liability to pay crystallises upon the delivery of equipment. Hence, the expenditure is considered as incurred on 15 Jan 2018 (i.e. in YA 2019) and the company will not be eligible to claim PIC Cash Payout on this expenditure. The cost of the copier machine paid on 1 Dec 2017 is regarded as prepayment.

Your company entered into a HP agreement with the vendor for a copier machine on 30 Nov 2017. Based on the agreement, the first instalment was scheduled on 3 Jan 2018.

For equipment acquired under HP agreement, the applicable PIC conversion rate to apply will depend on when the HP agreement is signed. In this scenario, the applicable conversion rate is 40% as the company entered into the agreement after 1 Aug 2016 but before the end of YA 2018. The 40% conversion rate will apply even for instalments* paid on or after 1 Jan 2018.

* The timing of the disbursement of cash payout is dependent on the actual principal sum repaid during each quarter or combined quarters. For details, please refer to Cash Payout for PIC IT and Automation Equipment under Hire-Purchase (HP) Agreement.

Your company entered into a contract on 5 Nov 2017 with a training provider and paid the full sum for a 1-day training course which was held on 7 Jan 2018.

The company will not be eligible to claim the PIC Cash Payout on this training expenditure. The training expenditure paid on 5 Nov 2017 will be regarded as a prepayment and the expenditure is incurred on the date of training (i.e. 7 Jan 2018) in YA 2019.


For more information and examples of when an expense is incurred, please refer to Examples of when an expenditure is considered incurred (PDF, 316KB) for YA 2018.

Treatment for straddled items

For expenditure incurred on PIC IT and automation equipment and registration of Intellectual Property Rights (IPR), partial conversion into cash payout is not allowed. This is because the conversion must be done on a "per equipment or per IPR registration basis" on the full cost of the qualifying expenditure, subject to the expenditure cap.

If the qualifying expenditure is greater than the amount qualifying for a cash payout conversion, the excess expenditure incurred will be forfeited and will not be available for deduction claims against the business income.

If you incur expenditure over 2 or more YAs and this extends beyond YA 2018, please refer to Treatment for Straddled Items Beyond YA 2018 (PDF, 373KB).