Productivity and Innovation Scheme in Singapore

Save Tax in Singapore through Productivity and Innovation Credit Scheme

  • What is Productivity and Innovation Credit Scheme:As per current Singapore laws, a Singapore registered entity is entitled to claim 400% tax deduction (Cost + 300% deduction) of expenditure incurred on certain specified activities under Productivity and Innovation Credit Scheme (“PIC Scheme”).
  • Who are eligible to claim benefit under Productivity and Innovation Credit Scheme?All businesses, including sole proprietorships, partnership firms, companies, registered branches and subsidiaries of a foreign parent or holding company, are eligible for PIC
  • Qualifying Activities for Productivity and Innovation Credit Scheme There are six qualifying activities for claiming PIC benefit which are as under:
    • Acquisition and leasing of 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
    • Investment in Design Projects
  • Qualifying Limit: Businesses which are qualified for claiming benefit under PIC Scheme can enjoy 400% tax deductions on up to $600,000 of their expenditure per year in each of the above qualifying activity. Thus, the maximum deduction available is 400% of $600,000 viz. $2,400,000 per year.
  • Qualifying period: Enhanced deduction is available is available till the Year of Assessment 2018 (viz. expenditure incurred till March 2017).
  • Cash Payout Option: For smaller businesses, instead of claiming 400% deduction, there is an option to claim cash refund equivalent to 60% of expenditure (40% w.e.f 1st August 2016) incurred on qualifying expenses subject to an overall limit of $100,000 per year.
  • How to avail PIC Scheme Benefit The 400% deduction can be claimed by the Company in the year of incurrence of expenditure while filing its return of income.

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