Singapore Productivity Innovation Scheme (2)

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					Productivity and Innovation
      Credit Scheme
                  PRODUCTIVITY AND INNOVATION SCHEME

 The Produc vity and Innova on Credit (PIC) Scheme has been further enhanced for Singapore Budget

 2011. It is a scheme to provide tax incen ves so as to encourage businesses to invest and upgrade along

 the innova on value chain. The table below outlines the benefits of PIC:




                                                                                            Before PIC:
                                                                                            Currently, businesses can typically deduct their expenses at
                                                                                            cost i.e. 100% as part of the general tax regime.

                                                                                            Tax savings = S$100,000 x 17%
      S$100,000

                  S$100,000




                              S$100,000

                                          S$400,000




                                                             S$17,000

                                                                        S$68,000

                                                                                            A er PIC:
                                                                                            Businesses can now enjoy 400% deduc on on the cost of
                                                                                            the same expenditure.

                                                                                            Tax savings = S$400,000 x 17%
    Expenditure               Deduc ons                    TAX SAVINGS



                                                      Brief descrip on of qualifying                Total deduc ons/allowances under the
 Qualifying ac vi es
                                                      expenditures under the PIC                    PIC (as a % of qualifying expenditure)
 Acquisi on or Leasing of Prescribed                  Costs incurred to acquire/lease
 Automa on Equipment                                  prescribed automa on equipment
 Training Expenditure                                 Costs incurred on:
                                                      In-house training (i.e. Singapore
                                                      Workforce Development Agency
                                                      (“WDA”) cer fied, Ins tute of Technical
                                                      Educa on (“ITE”) cer fied; or
                                                      All external training.                        400% allowance or deduc on for
                                                                                                    qualifying expenditure subject to the
 Acquisi on of Intellectual Property                  Costs incurred to acquire IPRs for
                                                                                                    expenditure cap, 100% allowance or
 Rights (“IPRs”)                                      use in a trade or business (exclude
                                                                                                    deduc on for the balance expenditure
                                                      EDB approved IPRs and IPRs rela ng
                                                                                                    exceeding the cap
                                                      to media and digital entertainment
                                                      contents)
 Registra on of Intellectual Property                 Costs incurred to register patents,
 Rights (“IPRs”)                                      trademarks, designs and plant variety
 Design Expenditure                                   Costs incurred to create new products
                                                      and industrial designs where the
                                                      ac vi es are primarily done in Singapore
 Research & Development (“R&D”)                       Costs incurred on staff, costs and             400% tax deduc on for qualifying
                                                      consumables for qualifying R&D                expenditure subject to the expenditure
                                                      ac vi es carried out in Singapore or          cap*. For qualifying expenditure
                                                      overseas, if the R&D done overseas is         exceeding the cap for R&D done in
                                                      related to the taxpayer’s Singapore trade     Singapore, deduc on will be 150%. For
                                                      or business                                   balance of all other expenses, including
                                                                                                    expenses for R&D done overseas,
                                                                                                    deduc on will be 100%


 Notes:
 Total expenditure cap for YA 2011 and YA 2012 - $800,000 for each of the six qualifying ac vi es.
 Total expenditure cap for YA 2013 to YA 2015 - $1,200,000 for each of the six qualifying ac vi es.


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Description: This page explains about Singapore tax incentive scheme to encourage businesses to invest, increase productivity and innovation through the PIC scheme.