Productivity and Innovation Credit (PIC) scheme

What is PIC?

With the PIC scheme, you will be able to incur investments in productivity and innovation. If you are operating a business and carrying out productivity investments, this is the time to enjoy huge tax savings under PIC. 

With our PIC schemes, offered in Singapore, you can claim up to 400 per cent reduction in tax or cash payout to companies that invest in automation equipment and activities that include hardware and software investments and training. 

You have two options: 

1. A tax deduction of 400 per cent 

Right from the years 2011 to 2018, you may incur a tax deduction of 400 per cent on up to $600,000 of your investment spending each year in software and hardware investments as well as training. 

As a result, your business can enjoy a tax deduction of up to $7,200,000, which is 400% × $1,800,000, for the hardware as well as software investment. 

You can calculate your taxes with this reference:

  • If you spend $ 40,000 in hardware or software, you may file an expenditure of $160,000 (which is 400%× $40,000) and obtain up to $ 27,200 (which is $160,000 × 17%) tax savings 
  • Therefore, you will get to enjoy 68% (which is $27,200 of $40,000) savings on your software and hardware expenses. 

2. Cash Payout Option

Right from the years 2011 to 2018,  you can convert up to $1,00,0000 of your investment spending per year into a non-taxable cash payout, all these at a conversion rate of 60%

If you are operating a small or growing business with at least three local employees (who happen to be Singapore citizens or permanent residents with CPF contributions).

Calculate your taxes with this reference:

  • If you spend $40,000 in hardware or software investment, you may convert this investment into a cash payout of $24,000 ($40,000 × 60%).
  • Thus, you will be able to enjoy 60% ($24,000 of $40,000) savings on your hardware and software costs 

PIC Claims

When you opt for the PIC scheme, you can look forward to increased tax savings for your business. You can claim up to 60% cash pay-out for investing in innovative, productivity-boosting sectors under the Productivity and Innovation Credit (PIC) scheme. These tax benefits are valid from the Years of Assessment (YAs) 2011 to 2018, for investing in automation equipment as well as hardware and software investments and training. What’s more, from years 2013 to 2015, your business can also benefit from PIC Bonus, which is a dollar-for-dollar matching cash bonus that’s bestowed on top of the existing 400% tax deductions/allowances.

When to submit?

  • You may submit anytime after the business accounting year end, but not later than the income tax return filling due date of income tax return for that year.

If you need more details on PIC, get in touch with us, or go through the information on IRAS Website