What is Productivity Innovation Credit (PIC)?

The PIC scheme supports investment in Innovation and Productivity. Businesses can enjoy huge tax savings in the form of Cash Payout and/or Tax Deduction. Enjoy 400% Tax Deduction in up to $400,000 of your spending each year in each of the six designated activities. Businesses receive a PIC Bonus when they invest in any of these six productivity improvement activities.

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Training of Employees

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Registration of Patents, Trademarks, Designs and Plant Varieties

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Acquisition and Leasing of PIC IT and Automation Equipment

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Acquisition and In-licensing of Intellectual Property Rights

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Research and Development Activities

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Investment in Design Projects Approved by the DesignSingapore Council

How PIC benefits you?

400% Tax Deduction

  • You can enjoy 400% tax deduction on up to $400,000 of your spending each year in each of the six activities.
  • This means a tax deduction of up to $1.6million ($400,000 x 400%) for each activity per YA. At the corporate tax rate of 17%, your tax savings can be up to $272,000 for each activity per YA.
  • In addition, you can combine your spending across YAs for each activity to enjoy the maximum PIC benefits as follows:
YA 2011 & 2012 2013 to 2015
Combined spending cap per activity $800,000 ($400,000 x 2) $1,200,000 ($400,000 x 3)
Maximum tax deduction per activity $3.2 million ($800,000 at 400%) $4.8 million ($1.2 million at 400%)
Potential tax savings @ 17% $544,000 $816,000

Cash Payout Option

  • You can apply to convert up to $100,000 of your total spending in all six activities into a non-taxable cash payout instead of claiming tax deduction. This option maybe more beneficial for businesses with low or no taxable income.
  • The maximum cash payout is:

    * A sum of $60,000 (60% x $100,000) for each YA from YA 2013 to YA 2015;

    * A total of $60,000 for YA 2011 and YA 2012 combined (30% x combined spending cap of $200,000).

To qualify for cash payout, your company must:

  • have employed at least three local employees (Singapore Citizens or Permanent Residents with CPF contributions, excluding shareholders who are directors of the company); and
  • carry on business operation in Singapore.

    **** Note: Please deduct any government grant or subsidy given on your investment and claim PIC benefits only on the net spending.

PIC Bonus

From YA 2013 to YA 2015, PIC bonus, which is a dollar-for-dollar matching cash bonus, will be provided on top of existing PIC benefits. The PIC bonus is capped at $15,000 over all 3 YAs combined. The PIC bonus is taxable.

Example:
Business makes $50,000 PIC investment, your company entitle to claim PIC benefits + PIC Bonus:
($200,000 Tax Deduction or $30,000 Cash Payout) + $15,000 (dollar-for-dollar cash bonus)

*** For more details information please refer PIC brochure provided by IRAS