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PIC – Productivity and Innovation Credit Scheme
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Information can be found here –
https://www.iras.gov.sg/irashome/Schemes...
PIC – Productivity and Innovation Credit Scheme
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At a glance
CASH PAYOUT TAX DEDUCTION/ALLOWANCE
Option to convert up to ...
PIC – Productivity and Innovation Credit Scheme
3
Illustration on claiming the tax deduction
Illustration of Cash Payout
PIC – Productivity and Innovation Credit Scheme
4
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Online Digital Marketing Platform - Incentives for SMB

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Online Digital Marketing Platform - Incentives for SMB

  1. 1. PIC – Productivity and Innovation Credit Scheme 1 Information can be found here – https://www.iras.gov.sg/irashome/Schemes/Businesses/Productivity-and-Innovation-Credit-Scheme/ What is it? It is an incentive to encourage businesses in Singapore to innovate and become more productive. Who is it for? This scheme is opened to all businesses, including sole proprietorships, partnerships, companies, registered branches and subsidiaries of a foreign parent or holding company. The PIC+ Scheme was introduced in Budget 2014 to provide support to small and medium enterprises (SMEs) who are making more substantive investments to transform their businesses. Under the PIC+ Scheme, the expenditure cap for qualifying SMEs will be increased from $400,000 to $600,000 per qualifying activity per Year of Assessment (YA). Qualifying for PIC+ Scheme Businesses eligible for the PIC+ Scheme are sole-proprietorships, partnerships and companies carrying on a trade or business in Singapore and whose: Revenue is not more than $100 million; or Employment size is not more than 200 employees. This criteria will be applied at the group level if the business is part of a group. Eligible businesses are referred to as "qualifying SMEs" henceforth. What is the scheme? There are 2 ways to claim PIC. 1. Cash payouts – 40% of qualifying expenditure OR 2. Tax deductions/Allowances - 400% of Qualifying Expenditure What are the Qualifying Expenditure? 1. Acquisition and Leasing of PIC IT and Automation Equipment 2. Training of Employees 3. Acquisition and Licensing of Intellectual Property Rights (IPR) 4. Registration of Patents, Trademarks, Designs and Plant Varieties 5. Research and Development (R&D) Activities 6. Design Projects Approved by Design Singapore Council
  2. 2. PIC – Productivity and Innovation Credit Scheme 2 At a glance CASH PAYOUT TAX DEDUCTION/ALLOWANCE Option to convert up to $100,000 of total spending in all six activities for each Year of Assessment into a non- taxable cash payout. With effect from 1 Aug 2016, the cash payout conversion rate will be 40% of qualifying expenditure. From YA 2015 to YA 2018, businesses can enjoy 400% tax deductions/allowances on up to $600,000 of qualifying expenditure per year in each of the six qualifying activities. Condition: - Carries on active business operations in Singapore. - Incurred qualifying expenditure and are entitled to PIC during the basis period of qualifying Year of Assessment. - Meets the 3 local-employee condition - Minimum qualifying expendition for each cash payout option application is $400 - For PIC IT and Automation equipment, equipment to be in use by the business at the point of electing for cash payout. Condition: - Carries on active business operations in Singapore - Incurred qualifying expenditure and are entitled to PIC during the basis period of qualifying Year of Assessment. YA 2013 to YA 2018 – ie till 31 Dec 2017 to incur expense YA 2011 to YA 2018 – ie till 31 Dec 2017 to incur expense 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. If your PIC-qualifying expenditure is incurred before 1 Aug 2016, the 60% cash payout rate will apply notwithstanding that your PIC cash payout application may be submitted on or after 1 Aug 2016. You can submit your cash payout claim anytime after* the end of your financial quarter, but not later than the income tax filing due date of the relevant YA. To Claim: From 1 Aug 2016, e-Filing of PIC cash payout applications will be compulsory and hardcopy application forms will not be accepted on or after this date. Taxpayers are advised to e-File their PIC cash payout applications early before the filing due date of the Income Tax Return. To Claim: Declare Enhanced deductions/ allowances in your Income Tax Return for the relevant YA by the filing due dates. https://www.iras.gov.sg/irashome/uploadedFiles/IRAS Home/Schemes/Businesses/Productivity_and_Innovatio n_Credit_Scheme/Overview%20of%20PIC%20Cash%20 Payout.pdf Any deduction/allowance that cannot be fully utilised in any Year of Assessment (YA) will form part of the unutilised trade losses/allowances of the business. The unutilised trade losses/allowances can be offset against other income of the business.
  3. 3. PIC – Productivity and Innovation Credit Scheme 3 Illustration on claiming the tax deduction Illustration of Cash Payout
  4. 4. PIC – Productivity and Innovation Credit Scheme 4

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