Productivity and Innovation Credit (PIC) was first introduced in Singapore Budget 2010 to encourage businesses to invest in innovation and improve productivity.
The PIC scheme provides 400% tax deduction/allowances (cap at S$400,000 per activity per year) for qualifying expenses incurred on each of the following six qualifying activities:
- Acquisition or leasing of PIC Automation Equipment
- Training of employees
- Acquisition of Intellectual Property Rights
- Registration of patents, trademarks, designs and plant varieties
- Research and development activities
- Investment in approved design projects
PIC scheme has been enhanced in four key areas to help businesses upgrade their operations and cope with tighter labor market.
The cash payout rate has been increased to 60% for up to S$100,000 of qualifying expenditure from YA2013 to YA2015. Businesses may also claim the cash payout on a quarterly basis any time after the end of each financial quarter, but no later than the filing due date of income tax return for each YA
In-house training courses
Qualifying in-house training expenditure incurred up to $10,000 per year is no longer required certification for PIC purpose. The total training expenditure cap eligible for tax deduction remains unchanged at $400,000 per annual.
Investment in automation equipment
With effect from YA2012, qualifying automation equipment acquired on hire purchase with repayment schedule straddling two or more financial years will be eligible for the cash payout option.
Research and Development (R&D)
Expenditure incurred on R&D cost-sharing agreements and In-house R&D software development may qualify as expenditure on R&D and hence enjoy PIC deduction.