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iras.gov.sg Productivity & Innovation Credit Scheme : Inland Revenue Authority of Singapore

Name of the Organization : Inland Revenue Authority of Singapore
Type of Facility : Productivity and Innovation Credit Scheme
Country : Singapore

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You can now ask your question related to this facility. Please go to the bottom of this page.

Website : https://www.iras.gov.sg/irashome/Schemes/Businesses/Productivity-and-Innovation-Credit-Scheme/

Productivity and Innovation Credit Scheme :

1. Reduction of cash payout conversion rate for qualifying expenditure incurred on or after 1 Aug 2016 from 60% to 40%; and

Related : Inland Revenue Authority of Singapore Wage Credit Scheme : www.statusin.org/24496.html

2. Mandatory e-Filing of Cash Payout applications. Hardcopy applications will not be accepted from 1 Aug 2016.

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

PIC Benefits :

Tax Deductions/ Allowances 400% tax deductions/ allowances on up to $400,000 of spending per year in each of the six qualifying activities.

 

PIC+ Scheme
From YAs 2015 to 2018, qualifying businesses can enjoy 400% tax deductions/allowances on up to $600,000 of qualifying expenditure per year in each of the six qualifying activities.

For more details, please refer to How PIC Benefits You.

Cash Payout Option to convert up to $100,000 of total spending in all six activities for each YA into a non-taxable cash payout, in lieu of the tax deduction/allowance.

 

For qualifying expenditure incurred from YA 2013 to 31 July 2016, the cash payout is 60%.

 

For qualifying expenditure incurred on or after 1 August 2016 to YA 2018, the cash payout conversion rate will be at 40%. Revised!

For more details, please refer to How PIC Benefits You.

Qualifying Conditions :

Tax Deductions/ Allowances Carries on active business operations in Singapore.
Incurred qualifying expenditure and are entitled to PIC during the basis period of qualifying YA.
Cash Payout Carries on active business operations in Singapore.
Incurred qualifying expenditure and are entitled to PIC during the basis period of qualifying YA.
Meets the three-local-employee condition.
Minimum qualifying expenditure for each cash payout option application is $400.For PIC IT and automation equipment claims relating to YA 2016 onwards, equipment to be in use by the business at the point of electing for cash payout.

you can write in to:
Inland Revenue Authority of Sinapore
Investigation & Forensics Division
55 Newton Road
Revenue House
Singapore 307987

Getting Help from IRAS :
** Register for PIC Seminars
** IRAS holds regular PIC seminars to help businesses understand how they may benefit from the PIC scheme.

The specially designed seminars include the following topics:
** Benefits of PIC Scheme
** Six Qualifying Activities under the Scheme
** Computation of Tax Deduction and Cash Payout Option
** PIC+ Scheme for Small and Medium Enterprises (SMEs)
** Application Details

Apply for PIC Cash Payout :
Applying via myTax Portal :
** Log in with your SingPass 2FA at mytax.iras.gov.sg.
STEP 1 :
** Authorise an employee or a third party via EASY

** Your company or partnership will first have to authorise an employee, business owner (director or partner) or a third party, such as a tax agent, for “PIC Cash Payout Matters” via e-Services Authorisation System (EASY).

** The authorisation is a one-off process and the authorised personnel will be able to make PIC cash payout applications for the company or partnership as long as his/ her authorisation remains valid.

STEP 2 :
** Prepare information needed to e-File the application and determine the incurred dates for your PIC qualifying expenditure

** Before you start e-Filing, get ready the necessary information stated in Essential Information for Completing PIC Cash Payout e-Service so that you can complete the application in one session.

** If you have incurred qualifying expenditure before and after 1 Aug 2016, you need to segregate your claims into two categories

a) Expenditure incurred before 1 Aug 2016 – 60% conversion rate; and
b) Expenditure incurred on or after 1 Aug 2016 to the last day of the basis period for YA 2018 (i.e. the last day of your financial year ending in 2017) – 40% conversion rate.

** The cash payout cap remains at $100,000 for a Year of Assessment (“YA”). Hence, you may wish to prioritise and claim cash payout for expenditure incurred before 1 Aug 2016 first (at 60%), before those incurred on or after 1 Aug 2016 up to the last day of the basis period for YA 2018 (at 40%).

** You may also refer to the following guidance on determining the dates that expenditure is incurred for PIC Cash Payout purposes.

STEP 3 :
** e-File PIC cash payout application and relevant forms online

** After an employee/ a third party is authorised for “PIC Cash Payout Matters” via EASY, he/ she can log in to mytax.iras.gov.sg to e-File PIC cash payout applications for the company or partnership. A sole-proprietor can log in to mytax.iras.gov.sg directly without any EASY authorisation.

** Please note that the ‘Apply for PIC Cash Payout e-Service’ only accepts one application a day for each quarter or combined quarters of each YA and up to 15 items of expenditures.

A. If you are claiming PIC qualifying expenditures of 15 items or less for one YA, you may submit a single PIC Cash Payout application even if the incurred dates straddle 1 Aug 2016. The PIC e-Service will automatically compute the eligible cash payout rate.

Tip :
** You may wish to consolidate the items (e.g. by vendor) and provide a detailed breakdown of the consolidated items and their qualifying costs in the description box.

B. If your PIC cash payout application consists of more than 15 items for one YA, please submit separate forms on two days in the following order to maximise your PIC Cash Payout conversion cap
(i) first application: for expenditure incurred before 1 Aug 2016; and
(ii) second application: for expenditure incurred on or after 1 Aug 2016.**

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