Productivity and Innovation Credit (PIC) from IRAS - applicable to Singapore market only
Budget 2016
As announced recently by the new Finance Minister, Mr Heng Swee Keat, the PIC scheme will lapse after YA 2018. In addition, the cash payout rate will be reduced from 60% to 40% for qualifying expenditure incurred on or after 1 August 2016
Budget 2014 -PIC Extension
As announced by Minister for Finance, Mr. Tharman Shanmugaratnam, in his Budget Statement for the Financial Year 2014, the PIC scheme will be extended for three years till YA 2018.
Any investment activities made in or after YA 2018 will not be eligible for the above scheme.
About PIC
Under the PIC Scheme, businesses can enjoy 400% tax deductions/allowances and/or 60% cash payout for investments made in any of the Six Qualifying Activities from the Years of Assessment (YAs) 2013 to 2018 from Inland Revenue Authority of Singapore (IRAS).
Example:
A retailer invested $30,000 in Aralco Retail Management and POS Software including hardware such as POS terminal, biometric scanner, card printer, bar code printer, etc.
The eligible retailer claims:
$18,000 being 60% x $30,000 spent
Total cash pay out to the retailer is S$18,000.
Note: PIC Bonus is no longer available from YA 2015
Qualifying Conditions
A business is considered to have met the 3-local-employees condition if it contributes CPF on the payroll of at least 3 local employees where 400% tax deductions/allowances on qualifying PIC expenditure is claimed - in the last month of the basis period for the YA to which the deductions/allowances relates.
Read about PIC on IRAS website