What is Productivity and Innovation Credit?
Introduced in Budget 2010, Productivity and Innovation Credit (PIC) Scheme aims to encourage Singapore businesses to upgrade their business capabilities by investing in productivity and innovation related activities.
Many businesses especially the SMEs will benefit from this measure.
(Normally referring to businesses or companies with accounting year ending from 31st January 2010 – 31st December 2014). Productivity and Innovation Credit Scheme is currently effective from YA 2011 – YA 2015
Productivity and Innovation Credit (PIC) Scheme covers 6 main activities:
- Purchase / Leasing of PIC Automation Equipment
Example: Purchase of IT Equipment such as Desktops, Laptops, Netbooks, Smartphones, Tablet PCs, Scanners, Printers and Copiers etc
Leasing of Office Copier Machines, cloud computing expenses such as Singtel (SAAS) Software-as-a-Service
- Training of Employees including Directors of the Company
Example: In-house training by own company staff (including directors) to existing staff (capped at SGD$10,000 per year of assessment
Training expenditure paid to external service providers which includes registration or enrolment fees, examination fees, tuition fees, aptitude test fees, rental of external training premises, meals, refreshments provided during the course and training materials etc.
- Acquisition of IPRs
Example: Acquisition cost of local or overseas patent, copyright, trademark, registered design, geographical indication, layout design of integrated circuits to accelerate market penetration
- Registration of IPRS
Example: Local or overseas official fees paid to the respective Registry (e.g. for filing application / registration), professional fees for registration of IPRs such as hiring a patent lawyer. Regardless of application outcome, the expenditure incurred qualifies for PIC
- Research & Development
- Approved Design Project
How does Productivity and Innovation Credit (PIC) Scheme work?
Either 400% tax deductions up to $400,000 expenditure per PIC qualifying activity; or Cash payout at 60% on up to $100,000 of the qualifying expenditure per year of assessment (from YA 2013 to 2015)
Conditions for Productivity and Innovation Credit (PIC) Scheme Cash Payout:
The entities eligible to apply for the cash payout are sole-proprietorships, partnerships, companies 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 / company is considered to have met the 3-local-employees condition if it contributes CPF on the payroll of at least 3 Singaporean / PR employees (regardless full-time or part-time) at the end of each relevant quarters.
If you are not sure regarding how the tax incentive – Productivity and Innovation Credit (PIC) Scheme can help you, we are able to assist or guide you in applying for the cash payout or handle your tax work in claiming the 400% tax deduction.
Our fees for Productivity and Innovation Credit (PIC) cash payout & Bonus as follow:
- Higher of $200 or 5% of PIC Expenditure (Non-refundable)