Productivity and Innovation Credit (PIC) benefits businesses and their total tax payable when they invest in activities under PIC. However, those activities must be approved and qualified by Inland Revenue Authority of Singapore (IRAS) before the business is entitled to enjoy the benefits laid down by the PIC scheme.
Below here are the 6 qualifying activities under PIC:
- IT and Automation
- Training of employees
- Acquisition and in-licensing of Intellectual Property Rights
- Registration of Intellectual Property Rights
- Research & Development activities
- Approved Design Projects
IT and Automation Equipment
IT Equipment possess the ability to store, retrieve, transmit and manipulate data while equipment with the ability to control a particular process are referred to Automation Equipment. IT and Automation Equipment can be categorised under 2 categories: Hardware and Software.
Some examples of hardware are:
- Photocopier machine
Some examples of software are:
- Microsoft Office
- Adobe Reader/ Illustrator
- MYOB Courses
- Foxit Reader
Training of employees
Training of employees is one of the qualifying activities under PIC. Costs incurred to provide training to employees for the purposes of the trade and business are claimable under PIC scheme. Types of training includes both internal and external training, they have to be accredited by Singapore Workforce Development Agency (WDA) or approve by Institute of Technical Education (ITE). If training is not accredited or approved, a cap of $10,000 per YA applies.
Acquisition and in-licensing of Intellectual Property Rights
Intellectual property (IP) refers to creations of the mind and can be owned and used for commercial benefit. IP can be protected by the Intellectual Property Rights either through formal registration or can be acquired automatically. In order for the other party to use that property or engage in an activity in relation to that property, acquisition or in-licensing of Intellectual Property Rights is needed. Costs incurred to acquire Intellectual Property Rights for use in a trade or business are claimable under PIC scheme.
Registration of Intellectual Property Rights
Trademarks, Patents, Plant Varieties and Designs are intellectual property rights and protections for owners of intellectual property (IP). Rights and protections will then be effective after formal registration. Costs incurred to register Trademarks, Patents, Plant Varieties and Designs are claimable under PIC scheme.
Research & Development activities
Research & Development (R&D) activities are qualifying activities under PIC as well. R&D activities refers to investigative activities that a business chooses to conduct with the intention of making a discovery to develop new products/ procedures, or to improve existing products/ procedures. Costs incurred on staff costs and consumables for qualifying R&D activities carried out in Singapore or overseas are claimable under PIC scheme.
Approved Design Projects
Design Projects refers to the creation of new products or industrial designs. Costs incurred to create new products or industrial designs where the activities are primarily done in Singapore are claimable under PIC scheme.
These are the six qualifying activities under PIC. For more information about the PIC scheme, please click here.