Are you maximising the benefits available under the PIC Scheme?
Examples of qualifying expenditure
For each activity, there are specified “qualifying expenditures” that will qualify for PIC benefits. Some examples have been listed
below for your reference:-
Activity
Qualifying Expenditure
Purchase or leasing of PIC
Information Technology (IT)
and Automation Equipment
• This refers to an automation equipment that is either:- included within a prescribed “PIC IT and Automation Equipment List” maintained
by the IRAS e.g. fax machine, laser printer, computer hardware and software, Cloud
computing payment; or
- approved by the Minister or the Comptroller of Income Tax on a case-by-case basis
• New additions to the prescribed list include website development costs (effective
from YA 2014), Bi-directional Mass Flow Metering System (MFM) installed on
bunker tankers that are approved by the Marine & Port Authority of Singapore
(MPA) (effective from YA 2015)
Training of employees
Examples include:• external course fees for employees (including training conducted by related companies)
• in-house training - salaries of trainers, meals & refreshments, training materials and
stationery
• training of individuals deployed under a centralised hiring arrangement (effective from
YA 2014)
Acquisition and In-licensing of
Intellectual Property Rights
(“IPR”)
Examples include:• payment to buy a patented technology for use in manufacturing process
• price paid for a copyright
Registration
of
patents,
trademarks, designs and plant
varieties
Examples include
• fees paid to register patent, trademark in Singapore or other countries
• professional fees for preparing documents / giving advice on the validity or
infringement of patent, trademark
Research and development
activities
Examples include:
• salaries for R&D personnel
• fees to R&D institute for creating a novel product
• consumables
Design projects approved by
DesignSingapore Council
Examples include:
• fees to engage in-house eligible designers
• fees to eligible external design service providers to carry out approved design activities
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What are the benefits?
Under the Scheme, an eligible business may claim PIC benefits via either of the 2 options:-
Option 2
PIC Cash Payout**
Option 1
PIC enhanced deductions /
allowances
Claim
PIC
deductions
allowances at 400%
/
Opt to convert qualifying
expenditure of up to S$100,000
per YA at a rate of 60% into a
non-taxable PIC cash payout.
[i.e. 100% (base) + 300%
(enhanced)]
on
qualifying
expenditure of up to S$400,000
per YA*
PIC Scheme
Additional PIC benefit
PIC Bonus**
Only applicable for YAs 2013 to 2015,
a dollar-for-dollar matching PIC Bonus
will be given based on the qualifying
expenditure, subject to a combined cap
of S$15,000 for all 3 YAs.
This is given on top of the 400% PIC
tax deductions/allowances or 60% PIC
cash payout chosen by the business.
The PIC Bonus is taxable.
* The expenditure cap of S$400,000 applies for each of the 6 qualifying activities i.e. PIC can be claimed on a maximum expenditure
of S$2.4 million (S$400,000 x 6) for each YA.
For the benefit of a large investment in a single-year, the expenditure cap of S$400,000 per activity can be combined as follows:-
YAs 2013 to 2015 - $1.2 million per qualifying activity
YAs 2016 to 2018 - $1.2 million per qualifying activity
**Qualifying
conditions
To be eligible for the PIC Cash Payout and PIC bonus, the company must have:a)
b)
c)
d)
Active business operations in Singapore
Incurred qualifying expenditure
For PIC bonus, incurred at least S$5,000 in qualifying expenditure for the YA
At least 3 local employees (Singapore citizens or Singapore permanent residents with CPF contributions) excluding
sole-proprietors, partners under contract for service and shareholders who are directors of the company. A business is
considered to have met the 3-local-employees condition if it contributes CPF on the payroll of at least 3 local employees in
the relevant month #.
# From YA 2016, the 3-local-employees condition will have to be met for a consecutive period of at least three months prior to
claiming the PIC cash payout.
Page 3
Directors
Associate Director
Senior Managers
Managers
Lim Peng Huat
phlim@complete-corp.com.sg
Shirley Lim
shirleylim@complete-corp.com.sg
Lim Mei Khim
limmeikhim@complete-corp.com.sg
Law Pei Serh
lawpeiserh@complete-corp.com.sg
Eileen Koh
eileenkoh@complete-corp.com.sg
Audrey Ong
audreyong@complete-corp.com.sg
Jacqueline Ng
jacquelineng@complete-corp.com.sg
Janice Ng
janiceng@complete-corp.com.sg
Agnes Sim
agnes_sim@complete-corp.com.sg
Laura Goh
lauragoh@complete-corp.com.sg