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.
Save Tax in Singapore through Productivity and Innovation Credit Scheme