Productivity and Innovation Credit (PIC)

    IRAS Announcement

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% (the cash payout rate is not determined by the date of submission of the cash payout application); and
2. Compulsory e-Filing of cash payout applications. Hardcopy applications will not be accepted from 1 Aug 2016.

Under the scheme, businesses can enjoy
a. 400% tax deductions / allowances or
b. 40% cash payout for investments

    What is PIC ?

PIC stand for Productivity & Innovation Credit scheme. It was introduced in Budget 2010 for Year of Assessment (“YA”) 2011 to YA 2015 to encourage productivity and innovation activities in Singapore. As announced in Budget 2014, the scheme is extended for three years till YA 2018.

    Following six activities are qualify for the grant.
PIC
Productivity & Innovation Credit scheme

Businesses will be able to tap on to the PIC Scheme to implement eHR Software System.The diagram below illustrates the benefits available to a business when it invests eHR Software System for productivity or innovation activities.

PIC grant
PIC grant
    Qualifying Conditions

Tax Deductions/ Allowances
Carries on active business operations in Singapore. Incurred qualifying expenditure and are entitled to PIC during the basis period of qualifying YA.

Cash Payout
Carries on active business operations in Singapore. Incurred qualifying expenditure and are entitled to PIC during the basis period of qualifying YA.
– Meets the three-local-employee condition.
– Minimum qualifying expenditure for each cash payout option application is $400.
– For IT and automation equipment claims relating to YA 2016 onward, equipment to be in use by the business at the point of electing for cash payout.

 

Source: IRAS Productivity & Innovation Credit scheme

https://www.iras.gov.sg/irashome/Schemes/Businesses/Productivity-and-Innovation-Credit-Scheme/