Updates on Productivity Innovation Credit (PIC)
I believed that most businesses in Singapore are familiar with Productivity and Innovation Credit (PIC) scheme. This scheme was launched in 2010 by IRAS and initially, this scheme is supposed to end in YA 2015 but was extended until YA 2018.
Most of the SME are familiar with this scheme because they might have tapped into PIC for their purchase of IT and automation software and hardware such as computers, printers, website and etc. They could benefit from a cash payout of 60% (up to S$100,000 per YA) or 400% deduction for up to $400,000 ($600,000 under PIC +) per YA.
Just to add since 1st of August 2016, IRAS had lowered PIC cash payout coverage to 40%.
To recap on the full scheme, you could refer to the chart below.
Purpose of this article
A lot of business owners had mistaken YA 2018 to be the year 2018 but in fact, it’s referring to the date of occurrence for your company expenditure. You might want to refer to IRAS to understand if the date of your purchase for PIC had fallen within the qualifying period. If you are unsure and required more information, feel free to email me or contact me at 91110936
To some companies, this might be your last opportunity to file your application for PIC scheme. I must confess that it is a very useful to most of the SME in Singapore because it benefits the business by lowering cost on their investment for engaging into productivity activities.
To end of the article, I would have to dispel certain myth shared to me by my clients.
- Most SME would use PIC for the purchase of IT, automation and training but you could also use them on Intellectual Property (IP), Research and Project Design.
- Besides Computer, Printer, Laptop, Website and Smart Phone, are the common equipment used on the purchase of PIC. However, if you feel that your purchase equipment is relevant to the productivity of the business, you could always write for approval on a case by case application.
- Training of foreign employees applicable does not mix up the qualifying condition with other schemes such as WSQ, ETS or Skill Future for example.
- No, PIC Bonus is over.
- Yes, this scheme is helpful for startup so long as you fulfilled the qualifying condition.
- Not only startup, foreign companies could also utilise this scheme if you qualify.
- For purchase of equipment back in 2016, it might be possible for you to still tap into the scheme for support.
- PIC schemes support leasing and hire purchase. Refer to this link.
- You might be interested in knowing the development of Post-PIC era. You might be interested to read this article from Straits Time as food for thoughts.
You could find a summary of the scheme from MOF website.