Productivity and Innovation Credit

Suite Capital can help with Productivity and Innovation Credit (PIC)

 

Productivity and Innovation Credit, or PIC as it is commonly called, is a system created by the Inland Revenue Authority of Singapore or IRAS. In the PIC system, PIC grants are awarded to business owners who invest in advancing innovation and productivity.

 

How to qualify for PIC Claim/Grant

 

In order to qualify for the PIC grant, a company must have incurred expenses on the following activities:

 

  1. Acquisition and leasing of PIC Information Technology and Automation Equipment

 

This includes fax machines, laptops, computers, printers, and computer software, among others. Cloud computing and website development expenses also fall under this. Purchase of air conditioners, vehicles, furniture, and refrigerators, however, do not qualify.

 

  1. Training of employees.

 

Employees here are either external or internal (as long as they are accredited by Workforce Development Agency, or by the Institute of Technical Education). Training attended by business owners do not qualify.

 

  1. Acquisition and In-licensing of Intellectual Property Rights

 

  1. Registration of Patents, Trademarks, Designs and Plant Varieties

 

  1. Research and Development Activities

 

  1. Design Projects Approved by Design Singapore Council

 

 

How PIC benefits you

 

The Productivity and Innovation Credit system was created for small and medium enterprises in Singapore. A business eligible under the system can benefit from it through tax deductions and cash pay outs.

 

Tax deduction Option

 

Qualified businesses can enjoy 400% tax deductions or allowances on up to $400,000.00 of their expenditure per year in the above mentioned activities. Businesses can file for their tax deduction in their income tax return for the relevant YA.

 

Cash Pay-out Option

 

Additional requirements are needed for a business to qualify for the cash pay-out option. Aside from incurring expenditures on the six qualifying activities, the company must have:

  • Active business operations in Singapore,
  • At least 3 local employees, either Singapore Citizens or Singapore permanent residents, with CPF contributions.

 

Proprietors, partners and shareholders who are company directors are all excluded from this list.

 

If a company meets all these requirements, they are eligible for the cash pay-out option. They can apply to convert 60% of their total expenditure incurred or up to $100,000.00 into a non-taxable cash pay-out.

 

 

With the help of Suite Capital, we can help you find the right PIC grant for you. Give us a call or email us today for all the details.

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