Productivity and Innovation Credit (PIC)

PIC provides enhanced tax deductions/allowances (net of grant or subsidy) for investments in a broad range of activities along the innovation value chain.

From YA 2011 to YA 2018, all businesses will be eligible for the PIC on 6 qualifying activities. 

Qualifying Activities Brief description of
qualifying expenditures
under the PIC
Total deductions/
allowances under the
PIC (as a % of qualifying
expenditure)
Examples of qualifying
expenditures
Acquisition or leasing of
certain automation equipment
Costs incurred to acquire/
lease prescribed automation
equipment

400% allowance/ deduction
for the first $400,000 of
qualifying expenditure

100% allowance/ deduction
for the balance expenditure

- Cost/ Lease expenses of
IT equipment such as fax
machine, laser printer,
computer and laptops.
- Cloud computing payment
- Website development costs
(including costs incurred for
the one-time registration of a
domain name for the website)
from YA 2014
Training Expenditure Costs incurred on:
(i) In-house training; or
(ii) All external training.

400% tax deduction for the
first $400,000 of qualifying
expenditure

100% deduction for the
balance expenditure

- Salaries and other
remuneration (excluding
director fees) paid to in-house
trainers for course delivery
- External course fees for staff
- Training of prescribed
agents/ representatives from
YA 2012
- Training of individuals
under a centralised hiring
arrangement from YA 2014
Acquisition and In-licensing
of Intellectual Property Rights
(IPRs)

Costs incurred to acquire IPRs
for use in a trade or business
(excluding EDB approved IPRs
and IPRs relating to media and
digital entertainment content)

Costs incurred on IPR
in-licensing from Years of
Assessment 2013 to 2015

400% allowance for the
first $400,000 of qualifying
expenditure

100% allowance for the
balance expenditure

Payment to buy a patented
technology for use in
manufacturing process

Price paid for copyright

Registration of IPRs Costs incurred to register
patents, trademarks, designs
and plant varieties

400% tax deduction for the
first $400,000 of qualifying
expenditure

100% deduction for the
balance expenditure

Fees paid to Intellectual
Property Office of Singapore
(IPOS) to register trademark
Research & Development
(R&D)
Costs incurred in Singapore on
staff costs and consumables
for qualifying R&D activities
carried out in Singapore or
overseas

400% tax deduction for the
first $400,000 of qualifying
expenditure

100% / 150% deduction for
the balance expenditure in
Singapore

Salaries for R&D personnel
and fees to R&D institute for
creating a novel product
Design projects approved by
Design Singapore Council
Costs incurred in Singapore
to create new products or
industrial designs

400% tax deduction for the
first $400,000 of qualifying
expenditure

100% deduction for the
balance expenditure

Fees to engage in-house
eligible designers or
outsourced to eligible design
service providers to carry out
approved design activities

For enhanced tax deductions, the expenditure cap of $400,000 per qualifying activity per YA can be combined across for YA 2016 to YA 2018 (i.e. $1.2 million per qualifying activity).

For PIC cash payout,  from YA2016 to YA 2018, the expenditure cap of $100,000 per YA for all six qualifying activities cannot be combined across YA 2016 to YA 2018.

With effect from YA 2016, the three-local-employees condition has to be met for a consecutive period of at least three months prior to claiming the cash payout. Previously the three-local-employees condition applied to the last month of the basis period for the qualifying YA for yearly application or last month of the quarter or combined consecutive quarters for quarterly application.

There is a reduction of PIC cash pay-out conversion rate for qualifying expenditure incurred on or after 1 Aug 2016 from 60% to 40%.

The tax deferral option under the PIC scheme for YA 2011 to YA 2014 has lapsed  by the end 2014 (YA2015).

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