17 January 2013

The Productivity and Innovation Credit scheme (PIC) grants businesses which invest in specified productivity and innovation activities enhanced deductions and/or allowances on up to $400,000 of qualifying expenditure incurred for each activity. These are in addition to the deductions and/or allowances allowable under current tax rules. PIC is available for Year of Assessment (YA) 2011 to YA 2015.

In lieu of a deduction, businesses may opt to convert qualifying expenditure of up to $100,000 for each YA into cash. The conversion rate is 30% (for YA 2011 and YA 2012) or 60% (for YA 2013 to YA 2015). Businesses may also opt to defer tax payment based on qualifying expenditure incurred for YA 2012 to YA 2015. Up to $100,000 per YA may be deferred to the following year.

PIC benefits are granted to equipment that are either prescribed under the Income Tax (PIC Automation Equipment) Rules 2012 or approved by the Minister or the Comptroller of Income Tax as a PIC automation equipment on a case-by-case basis.

Examples of automation equipment qualifying for PIC, listed by industry such as construction, food manufacturing, retail and wholesale, have now been provided by IRAS on its website.

Source: Inland Revenue Authority of Singapore (IRAS)