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Productivity and Innovation Credit (PIC) Scheme

Let’s get government assistance for Software and Hardware Investments!

Turn your innovation and investments into SAVINGS!

What is PIC?

The PIC scheme supports investments in Innovation and Productivity. Businesses investing in productivity improvements can now enjoy huge tax savings under PIC.

PIC scheme gives up to 400% tax deduction or cash payout to companies investing in automation equipment and activities. These include software and hardware investments, as well as training.

There are two options:

  1. 400% Tax Deduction

    For YA 2011 to YA 2015, you can enjoy 400% tax deduction on up to $400,000 of your investment spending per year in software and hardware investments, as well as training.

    This means your business will be entitled to a tax deduction of up to $1.6 million (400% x $400,000) for software and hardware investment.

    Below is the example of tax calculation for your reference:

    • By spending $ 40,000 in software and/or hardware, you can file an expenditure of $ 160,000 (400% x $40,000) and get up to $27,200 ($160,000 x 17%) tax savings.
    • So you can enjoy 68% ($27,200 of $40,000) savings on your software and/or hardware costs

  2. Cash Payout Option

    For YA 2011 to YA 2013, you can apply to convert up to $100,000 of your investment spending per year into a non-taxable cash payout at a conversion rate of 30%.

    The cash payout is a good option for small and growing business that have employed at least three local employees (Singapore Citizens or Permanent Residents with CPF contributions).

    Below is the example of tax calculation for your reference:

    • By spending $ 40,000 in software and/or hardware, you convert your software and/or hardware investment into cash payout of $12,000 ($40,000 x 30%).
    • So you can enjoy 30% ($12,000 of $40,000) savings on your software and/or hardware costs

    How to claim?

    • Claim tax deduction in income tax return (400% tax deduction)
    • Submit PIC cash payout application form (Cash payout)

    When to submit?

    • Any time after the business accounting year-end but not later than the income tax return filling due date of income tax return for that YA.

Contact us for more information on PIC, or you may check from IRAS Website.