The productivity and innovation credit (PIC) was introduced in 2010 to encourage innovation and productivity in businesses.
To be eligible for this scheme, all businesses must have employed and made CPF contributions for at least three local employees (excluding directors of the company, be it sole-proprietors, partners and shareholders), incurred PIC-qualifying expenditure (refer to them below) during the basis period of the qualifying YA, and of course business operations must be active in Singapore.
Businesses can enjoy a 400% tax deduction or 30% cash payout for investments under the following six qualifying activities according to IRAS:
- Acquisition and leasing of PIC Information Technology (IT) and Automation Equipment;
- Training of employees;
- Acquisition and In-licensing of Intellectual Property Rights;
- Registration of patents, trademarks, designs and plant varieties;
- Research and development activities; and
- Design projects approved by DesignSingapore Council.
More good news, in Budget 2013, the PIC Bonus was introduced “to provide businesses a dollar-for-dollar matching cash bonus on top of the existing PIC tax deductions and/or cash payout.”
For further details of qualifying and non-qualifying expenditure, you can visit the relevant IRAS link here.
If you are unsure, contact IRAS at email@example.com or call them from 8am to 5pm on weekdays:
Companies 1800-356 8622
Self-employed/partnership (+65) 6351 3534
Company Director Jailed for Fraudulent PIC Claims
Sometime in September 2013, a company director, Mr Khoo Tzyh Shin was jailed for eight weeks. Khoo had falsified invoices and declared a sum of S$193,812 as qualifying expenditure in order to claim the PIC cash payout when there was no such expenditure incurred by the company.
As a result, Khoo was ordered by the court to pay a penalty of $232,574.40 for the crime. His company, Greenit Pte Ltd was also ordered to pay a fine of $10,000 and a penalty of $232,574.40, which is four times the amount of cash payout that it had fraudulently claimed.
For full details of the press release, read here.
Engaging Consultants to Claim your PIC
According to IRAS, “Regardless of whether businesses file the PIC claims on their own or with the help of consultants, businesses are ultimately responsible for the accuracy of the claims.” Find out more here.
Hence it is vital that you seek professional and reliable advice if you’re unsure about claiming for PIC on your own.
If you need help with PIC or have questions, feel free to fill the form below and we’ll get back to you the soonest we can.