Budget 2015 : Productivity and Innovation Credit scheme

SINGAPORE — The Productivity and Innovation Credit (PIC) scheme was first announced in Budget 2010 for Year of Assessment (YA) 2011 to YA 2015 to encourage productivity and innovation activities in Singapore. Last year, the scheme was extended for three more years until YA 2018.

Under this scheme, businesses can get 400 per cent tax deductions/allowances capping at S$400,000 of their expenditure per year. All expenses must fall under the following six qualifying activities: Acquisition and leasing of PIC information technology (IT) and automation equipment, training of employees, acquisition and in-licensing of intellectual property rights, registration of patents, trademarks, designs and plant varieties, research and development activities and design projects approved by DesignSingapore Council.

In 2013, the Government enhanced the PIC scheme by announcing a new cash bonus for participating firms. Businesses that spend a minimum of S$5,000 in PIC activities in a year received cash bonus equivalent to the amount spent. The bonus was capped at S$15,000 per year up to YA 2015.

Finance Minister and Deputy Prime Minister Tharman Shanmugaratnam today (Feb 23) said the Government will let the PIC Bonus expire in YA 2015 as there is good take-up of the PIC scheme.

Last year, a higher level of support, the PIC+ scheme, was also introduced to provide support to small and medium enterprises that were making more substantial investments to transform their businesses. The expenditure cap for each qualifying activity was raised to S$600,000 annually, allowing SMEs to claim enhanced tax deductions of up to S$1.8 million per activity between 2016 and 2018.