Productivity & Innovation Credit
The Productivity and Innovation Credit (“PIC”) Scheme was introduced in Budget 2010 for 5 years from YA 2011 to YA 2015 to encourage businesses to invest in productivity and innovation. The scheme was extended in Budget 2014 for another three years (YA2016 to YA2018).
Under the PIC scheme, businesses can convert qualifying expenditure into a non-taxable cash payout at a cash payout rate of 60% on up to $100,000 of expenditure across six qualifying activities per YA.
Alternatively, they can claim 400% deduction for up to $400,000 ($600,000 under PIC +) of qualifying expenditure for each of the six qualifying activities per YA.
The six qualifying activities are:
- Acquisition and leasing of PIC IT and Automation Equipment;
- Training of employees;
- Acquisition and licensing of Intellectual Property Rights;
- Registration of Patents, Trademarks, Designs and Plant varieties;
- Research and development activities; and
- Design projects approved by DesignSingapore Council
The cash payout rate will be lowered from 60% to 40% for qualifying expenditure incurred from 1 August 2016. All other conditions under PIC scheme remain unchanged.
The PIC scheme (including PIC+), which has been extended for YA2016 to YA2018, will expire thereafter. It will not be available from YA2019.
Please refer to IRAS’ website for more details on the PIC Scheme.