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Productivity and Innovation Credit (PIC)

What is PIC

The PIC scheme supports investments in Innovation and Productivity. Businesses investing in productivity improvements can now enjoy huge tax savings under PIC.

PIC scheme gives up to 400% tax deduction or 60% cash payout to companies investing in automation equipment and activities. These include software and hardware investments, as well as training.

There are two options:

  1. 400% Tax Deduction For YA 2011 to YA 2015, you can enjoy 400% tax deduction on up to $400,000 of your investment spending per year in software and hardware investments, as well as training.

    This means your business will be entitled to a tax deduction of up to $1.6 million (400% x $400,000) for software and hardware investment.

    Below is the example of tax calculation for your reference:
    By spending $ 100,000 in software and/or hardware, you can file an expenditure of $ 400,000 (400% x $100,000) and get up to $68,000 ($400,000 x 17%) tax savings. So you can enjoy 68% ($68,000 of $100,000) savings on your software and/or hardware costs.

  2. Cash Payout Option For YA 2011 to YA 2013, you can apply to convert up to $100,000 of your investment spending per year into a non-taxable cash payout at a conversion rate of 60%.

    The cash payout is a good option for small and growing business that has employed at least three local employees (Singapore Citizens or Permanent Residents with CPF contributions).

    Below is the example of tax calculation for your reference:
    By spending $ 100,000 in software and/or hardware, you convert your software and/or hardware investment into cash payout of $60,000 ($100,000 x 60%). So you can enjoy 60% ($60,000 of $100,000) savings on your software and/or hardware costs.

How to claim PIC?

  1. Claim tax deduction in income tax return (400% tax deduction)
  2. Submit PIC cash payout application form (Cash payout)

When to submit?

Any time after the business accounting year-end but not later than the income tax return filling due date of income tax return for that YA.

For more information, you may check the IRAS Website.

Utilizing the PIC grant

Check out all the IT grants available for Deskera

This page contains information extracted from iras.gov.sg website  and aims to provide a general overview of the key concepts of the Government IT Grant to Singapore Companies. Visit iras.gov.sg website for more information.

Check out all the IT grants available for Deskera