Productivity and Innovation Credit (PIC)

Productivity and Innovation Credit (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. 

Please note that the PIC will expire after YA 2018.

Qualifying Activities

Brief description of
qualifying expenditures
under the PIC

Total deductions/
allowances under the
PIC (as a % of qualifying

Examples of qualifying

Acquisition or leasing of
certain automation equipment

Costs incurred to acquire/
lease prescribed automation

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

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

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

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

100% deduction for the
balance expenditure

Fees paid to Intellectual
Property Office of Singapore
(IPOS) to register trademark

Research and Development

Costs incurred in Singapore on
staff costs and consumables
for qualifying R&D activities
carried out in Singapore or

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

100%/150% deduction for
the balance expenditure in

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

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 pay-out from YA 2016 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 pay-out and put the PIC IT and Automation equipment to use. Previously, the three-local-employees condition was 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 August 2016 from 60% to 40%.