Singapore
Singapore
In the constantly evolving world of business, advancing innovation and enhancing productivity contribute greatly to the future of any enterprise. To stay competitive, businesses must consistently move forward to fulfil its financial goals and aspirations.
The Singapore government understands the importance of Innovation and Productivity in growing enterprise. In support of Singapore-based businesses, it has created the Productivity and Innovation Credit (PIC) scheme. The PIC allows you to get tax incentives for activities such as upgrading your Canon devices or software, sending your staff overseas for further study, or even undertaking research work.
Discover more about the PIC and the many ways your company can benefit from it.
The PIC scheme, under the Inland Revenue Authority of Singapore (IRAS), offers tax savings in the form of cash payouts and/or tax deduction for investments in innovation and productivity.
All businesses, including branches and subsidiaries of foreign incorporated companies operating in Singapore, are eligible for PIC. The only requirement is for them to incur expenditure in any of the 6 productivity improvement activities.
Under the PIC scheme, businesses can claim tax benefits from their investments in 6 productivity improvement activities. From training staff, improving office equipment, research, acquisition of Intellectual Property Rights, to registration of trademarks and patents, the PIC offers cash payouts and/or tax deductions to businesses in Singapore.
1. PC Automation Equipment
Costs of acquisition or lease of automation equipment, such as computer, software, POS system, computer numerical control (CNC) cutting machine, self-climbing scaffold system, automated warehousing equipment and software.
Among the PIC-qualified equipment is the new generation series of Canon imageRUNNER ADVANCE multifunction devices that let you work better and smarter with features that boost productivity, increase security and enhance mobility. Canon Business Solutions like document scanners, multimedia projectors, document and print management software, as well as cloud solutions that encourage greater efficiency and productivity also qualify for the PIC scheme.
2. Research and Development (R&D)
Costs of consumables and staff costs in R&D activities for the production or improvements of materials, devices, products, produce or processes.
3. Registration of Intellectual Property Rights (IPR)
Costs of registration of patents, trademarks, designs and plant varieties.
4. Acquisition of Intellectual Property Rights (IPR)
Costs of acquisition of the legal and economic ownership of the IPR for use in your business, such as patents, copyrights, and trademarks.
5. Training of Employees
Costs of internal and external training of employees, includes course fee, remuneration paid to in-house trainers, rental of training facilities, training materials, meals and refreshments.
6. Approved Design Project
Administered by DesignSingapore Council, the approved design activities may be conducted by your company or outsourced to an approved design service provider.
Based on your spending in the 6 productivity improvement activities, the PIC offers you the flexibility to apply for tax deduction, cash payout or tax deferral.
1. 400% Tax Deduction
Get 400% tax deduction of up to $400,000 of your spending in each of the 6 activities instead of the usual 100% deduction/allowances under existing tax rules. You may also combine your $400,000 annual spending cap across YAs, as illustrated in the table below:
| Year of Assessment (YA) | Expenditure Cap per Qualifying Activity* | Tax Deduction per Qualifying Activity |
| 2011 and 2012 (Combined) |
$800,000 | $3,200,000 (400% x $800,000) |
| 2013 to 2015 (Combined) |
$1,200,000 | $4,800,000 (400% x $1,200,000) |
Text – * Only if you are carrying on a trade or business for the relevant YAs. Otherwise, the combined cap is reduced accordingly.
To claim: Claim tax deduction when you file your Income Tax Return
2. Cash Payout Option
Get a non-taxable cash payout of up to $60,000 of your total spending in all 6 activities. This option may be more beneficial for businesses with low or no taxable income. The maximum cash payout is $60,000 for each YA. This is based on 60% of expenditure cap of $100,000 for each YA for all 6 activities.
To claim: Submit PIC Cash Payout Application Form
3. Tax Deferral Option
Enjoy deferred tax payments. For every dollar of your investment spent in any of the 6 qualifying activities in accounting years 2011-2014, you can defer paying the same amount in tax (up to $100,000) for the corresponding YAs 2011-2014, till the next year. This option is to help businesses with their cash flow and investments in productivity.
To claim: Submit the PIC Cash Deferral Form
4. PIC Bonus
Given to businesses that invest in the 6 activities, the PIC Bonus is a dollar-for-dollar matching cash bonus for YAs 2013-2015, subject to an overall cap of $15,000 for all 3 years combined. This is given on top of the existing 400% tax deductions/allowances and/or 60% cash payout under the PIC scheme.
Forward-thinking and efficient processes are key factors in keeping any business competitive. But the pursuit of progress may prove to be quite a challenge, especially for businesses with tight finances. It is a comfort to know that there is a growing support system for entrepreneurs, more so in the government sector. With schemes like the PIC offering financial assistance in the form of tax savings, Singapore-based businesses can continue to advance innovation and productivity.