Singapore : Frequently Asked Questions on SME Cash Grant for Year of Assessment

 (Updated on 24 Oct 2012)

1. What is the rationale of the qualifying condition that the company must have made CPF contributions for at least one employee (excluding employees who were shareholders) in the basis period for YA 2012?

The CPF contribution condition is imposed to ensure that companies benefitting from the SME Cash Grant are those doing real business activities and incurring business costs.

2. Is there a minimum amount of CPF contribution before the company is entitled to the SME Cash Grant? What happens if the company has only one employee?

There is no minimum threshold set for the amount of CPF contribution or the number of employees. If the company has made CPF contributions for at least one employee who was not a shareholder of the company during the basis period for YA 2012, the company will be eligible for the SME Cash Grant.

3. My company is in a loss position for YA 2012. Will my company receive the SME Cash Grant?

If the company has made CPF contributions for at least one employee who was not a shareholder of the company during the basis period of YA 2012, it will receive the SME Cash Grant.

4. How will I be notified if my company is entitled to the SME Cash Grant?

You will receive a SME Cash Grant Notice stating the amount of SME Cash Grant that will be paid to the company.

5. How will the payment of SME Cash Grant be made?

Companies can expect the SME Cash Grant to be credited into their GIRO account (in IRAS’ records). Companies without GIRO accounts will receive cheques from IRAS. If you have received the payment via cheque, please deposit it into your company’s bank account within three months.

6. Will the SME Cash Grant be used to offset my company’s tax arrears?

Yes. The SME Cash Grant will be used to offset any tax arrears (such as Income Tax, Property Tax, GST) of the company before any remaining amount is paid. We will notify the company of the offset accordingly.

7. My company uses different bank accounts for GIRO payment of income tax and GST. In which bank account will the SME Cash Grant be credited to?

The SME Cash Grant will be credited into your company’s income tax GIRO account. If the GIRO credit is unsuccessful, a cheque will be issued to your company instead.

8. Are there restrictions on how the company should use the SME Cash Grant?

No, there are no restrictions. The company may decide how to use the SME Cash Grant.

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9. Under a group centralised hiring system, Company A was recharged with employment costs by a related company for an employee who worked for Company A. Will Company A be considered to have met the CPF contribution requirement and qualify for the SME Cash Grant?

Company A will qualify for SME Cash Grant if:

i) It is able to produce supporting documents on the recharging of employment costs by a related company (Company B), in respect of employees working solely in the business of Company A; and

ii) The corporate structure and centralised hiring practices were adopted for bona fide commercial reasons.

iii) The employee whose cost has been recharged will not contribute to the requisite headcount of Company B (which bore the upfront manpower costs) for purposes of the SME Cash Grant.

10. Will the corporate partner of a Limited Liability Partnership (LLP) be eligible for the SME Cash Grant?

Yes, the corporate partner of the LLP will be eligible for SME Cash Grant.

For the purpose of allowing the SME Cash Grant to the corporate partner, IRAS will treat the CPF contribution requirement as met if the LLP has made CPF contributions for at least one employee who was not a shareholder of the corporate partner of the LLP during the basis period for YA 2012.