Want to improve your business? Here’s how the Productivity and Innovation Credit (PIC) scheme can help you

The Singapore government has always been a strong proponent for improving productivity in the country. In conference held by the Singapore Business Federation in November 2016, Minister of Manpower, Lim Swee Say, said, “If productivity gains continue to lag behind wage growth, Singapore’s competitiveness will slide down.”

The government introduced the Productivity and Innovation Credit (PIC) Grant in the 2011 budget. It has since been extended to till 2018 to encourage productivity and innovation activities in Singapore. There have been changes since the scheme was first introduced. However, under the latest PIC scheme (2016-2018), businesses will get to enjoy 400% tax deductions/ allowances for any qualifying expenditure incurred between Years of Assessment (YA) 2011 to 2018. Alternatively, companies can also choose to apply for the PIC cash payout of up to $100,000.

So, If you’re looking to transform your business or make investments to improve your company’s efficiency, here’s how you can go about claiming the PIC grant in Singapore in four easy steps.

STEP 1: Check your eligibility:

All businesses, including sole proprietorships, partnerships, companies, registered branches and subsidiaries of a foreign parent or holding company are eligible for PIC.

STEP 2: Do your activities qualify for the PIC grant?

You need to check if your investment or activity qualifies under the PIC. Here are the six activities that are covered:

 

Step 3: Claiming Tax Deductions/ Allowances

Aside from design projects, you will not require any prior approval from IRAS. All you need to do is to claim enhanced deductions/ allowance in your Income Tax Return for the relevant  Year of Assessment (YA) by filling the due date.

For example, if your company has invested in new machinery and sent your staff for some customer service courses in 2016 (YA: 2017), you can claim PIC enhanced allowance/ tax deduction in you income tax return for YA 2017. Provided you tick all the boxes for the qualifying conditions.

Step 4: Claiming PIC cash payout

To claim PIC cash payout, companies would need to fill out the PIC Cash Payout Application form online anytime after the end of the financial quarter. But this must be done before the due date of your income tax return.

For example, if your company has invested in a new Point-of- Sale (POS) system and sent your staff for customer services courses, you can submit the PIC cash payout application form via mytax.iras.gov.sg anytime after the end of the relevant financial quarter(s).

With the PIC grant, investing in upgrades to improve your company’s productivity and efficiency would cost less and is made easier. Now that you know how to reap PIC benefits, you can easily look for contractors to help you out here.

If you’re still unsure, IRAS provides PIC consultants to help you calculate how much you can claim and how to properly fill out the online form for cash payouts on their site. For more information on the PIC grants and qualifying conditions, visit the Inland Revenue Authority Singapore (IRAS) website.

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