The Productivity and Innovation Credit (PIC) was introduced in the Singapore Budget 2010 and further enhanced in Budget 2011 to encourage productivity and innovation. This scheme provides enhanced tax incentives for investments in a wide range of activities:

• Automation equipment
• Training of employees
• Research and development
• Registration of intellectual property rights
• Acquisition of intellectual property rights
• Design (prior approval required)

Businesses that invest in a qualifying activity can deduct 400% of the expenditure from their taxable income, with a cap of $400,000 on expenditure for each activity per Year of Assessment (YA) and a combined cap of $800,000 for the first two YAs.

In the amendment of schedule to the Income Tax (automation equipment) Rules 2004 (G.N. S 487/2004), information technology software including enterprise resource planning (ERP), customer relationship management (CRM), inventory management, knowledge management, assets management, etc is included in the defination. RFID and bar-coding system are also inserted in the defination of automated system.

Businesses can also apply to the Inland Revenue Authority of Singapore (IRAS) for a cash payout under the Productivity and Innovation Credit (PIC) scheme. Application for the cash payout will have to be completed and submitted to IRAS for approval. The form can be found on the IRAS's website at www.iras.gov.sg.

For PIC factsheet, please click here.
For PIC FAQs, please click here.
To speak to our consultant, please click here.