Definition of Productivity and Innovation Credit
Productivity and Innovation Credit Scheme is also known as the PIC scheme. The scheme was introduced by the Government in Singapore during the 2010 Budget and thereafter it has been enhanced through every year’s budget. The PIC scheme will lapse after Year of Assessment 2018 as announced in Budget 2016.
The PIC scheme has been introduced with the aim of encouraging businesses to invest in the sectors like research and development, innovation, automation, and training for the benefit of a significant tax deduction or cash pay-outs for their.
6 Major Activities covered under PIC Scheme:
- Purchasing or Leasing of PIC automation equipment and information technology
- Training of employees of all levels
- Licensing and Acquisition of intellectual property rights
- Registration of designs and plant varieties along with the patents and trademarks
- Research and Development Rights
- Designing of projects those approved by Design Singapore Council
Benefits of PIC Scheme
- Businesses can benefit from up to 400% tax deductions/allowances – only when their expenditures are spent on either of the six qualifying activities out of their income
- Businesses can get 60% cash pay-outs from YAs 2013 to 31 July 2016 – provided they have active business operations in Singapore, the necessary qualifying expenditure is incurred during the basis periods and the company must hire at least three local employees with CPF contributions. (Note that the 3 local employees exclude sole-proprietors, partners under contract for service and directors who has shares in the company, should contribute to CPF on payroll.)
- From 1 August 2016 onwards, the cash pay-out rate will be at 40%.
Procedure for applying PIC Scheme
- For businesses that want to claim the 400% tax deductions/allowances while filing the tax returns, their due date will be on 15thApril in the case of sole proprietorship and partnerships.
- In the case of companies, the due date will be on 30th
- PIC Cash pay-outs Application Form will need to complete and submit the directly to IRAS.
You need not worry about the procedures of claiming PIC on how to benefit your business with PIC Scheme. We assist, guide and help you to apply for your 400 percent tax deduction and cash pay-out at very low and affordable fees.