Productivity and Innovation Credit (PIC)
Productivity and Innovation Credit (PIC)
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 | Total deductions/ | Examples of qualifying |
Acquisition or leasing of | Costs incurred to acquire/ | 400% allowance/deduction 100% allowance/deduction | Cost/Lease expenses of Cloud computing payment Website development costs |
Training Expenditure | Costs incurred on: | 400% tax deduction for the 100% deduction for the | Salaries and other External course fees for staff Training of prescribed Training of individuals |
Acquisition and In-licensing | Costs incurred to acquire IPRs Costs incurred on IPR | 400% allowance for the 100% allowance for the | Payment to buy a patented Price paid for copyright |
Registration of IPRs | Costs incurred to register | 400% tax deduction for the 100% deduction for the | Fees paid to Intellectual |
Research and Development | Costs incurred in Singapore on | 400% tax deduction for the 100%/150% deduction for | Salaries for R&D personnel |
Design projects approved by | Costs incurred in Singapore | 400% tax deduction for the 100% deduction for the | Fees to engage in-house |
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%.