21Jul
2016
Posted: 21 Jul 2016

Productivity and Innovation Credit Scheme (Updates)

Tag: Announcements

From 1 Aug 2016, the following changes to PIC Cash Payout Scheme will take effect:

1. Reduction of cash payout rate for qualifying expenditure incurred on or after 1 Aug 2016 from 60% to 40%; and
2. Compulsory e-Filing of cash payout applications. Hardcopy applications will not be accepted from 1 Aug 2016.

From 5 Jul 2016, 2-Step Verification or 2FA is required when you access IRAS' e-Services using SingPass. If you have not set up your 2FA, you will be given a one-time grace period of 30 days to do so upon first login to SingPass. Please set up your 2FA within the grace period so that you can e-File your PIC cash payout applications. For more information, please visit the SingPass website.

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Businesses may claim PIC benefits on costs incurred to provide training to employees for the purposes of trade and business. Training may refer to external training and in-house training.

The qualifying expenditure for PIC benefits is the expenditure amount minus the grant or subsidy by the Government or any statutory boards. More details can be found in the IRAS website (www.iras.gov.sg), PIC scheme

Summary of PIC Benefits

Tax Deductions/ Allowances

400% tax deductions/ allowances on up to $400,000 of spending per year in each of the six qualifying activities.

PIC+ Scheme
From YAs 2015 to 2018, qualifying businesses can enjoy 400% tax deductions/allowances on up to $600,000 of qualifying expenditure per year in each of the six qualifying activities.

For more details, please refer to How PIC Benefits You.

Cash Payout

Option to convert up to $100,000 of total spending in all six activities for each YA into a non-taxable cash payout, in lieu of the tax deduction/allowance.

For qualifying expenditure incurred from YA 2013 to 31 July 2016, the cash payout is 60%.

For qualifying expenditure incurred on or after 1 August 2016 to YA 2018, the cash payout conversion rate will be at 40%. Revised!

For more details, please refer to How PIC Benefits You.

 

The six activities covered under PIC are:

  • Acquisition or leasing of PIC information technology (IT) and automation equipment;
  • Acquisition or licensing of intellectual property rights (IPRs)
  • Registration of certain IPRs
  • Research and development (R&D)
  • Training
  • Design