My company has just purchased colour printers, smart hand phones and upgraded some computer software? Are they claimable under PIC?
My company has just purchased colour printers, smart hand phones and upgraded some computer software? Are they claimable under PIC?
Many business owners are too busy to care about taxation matters. But who then, is looking out for your business by minimizing your tax exposure? Are you in danger of losing out on tax benefits because you are too busy with other aspects of your business?
Team 361 has an experienced pool of consultants to take care of your taxation needs. We understand that PIC claims can be a tedious affair for business owners, most of whom do not have time to spare, or the knowledge to successfully make these claims that can be substantial enough to improve their cash flow.
The Productivity and Innovation Credit (“PIC”) was introduced in the Singapore Budget 2010.
PIC has been enhanced in Budget 2011 to provide tax benefits for investments by businesses in a broad range of activities along the innovation value chain. The tax benefits under PIC will be effective from Years of Assessment (YA) 2011 to YA 2015.
The six activities along the innovation value chain that will qualify for PIC benefits are:
* PIC Automation Equipment are equipment that are prescribed under the new PIC Automation Equipment List.
Businesses that invest in specialised equipment not in the PIC Automation Equipment List, to automate their processes and to enhance productivity may apply to IRAS to have their equipment approved for PIC on a case-by-case basis.
For YA 2011 to YA 2015, all businesses can enjoy deduction/allowances at 400% on up to $400,000 of their expenditure per year on each of the six qualifying activities instead of the 100%/150% tax deduction/allowances under the existing tax rules.
To enable businesses to enjoy maximum PIC benefits, the annual expenditure cap of $400,000 for each activity are pooled to give a combined cap for the period YA 2011 and YA 2012 and the period YA 2013 to YA 2015. With the pooling, deduction/allowances are subject to the following expenditure cap:
Businesses would therefore be able to enjoy a total tax deduction of up to $3.2 million for YAs 2011 and 2012 and up to $4.8 million for YAs 2013 to 2015 as summarised here:
*Note: As of 1 April 2020, all applications for EDG should include commitment to worker outcomes as part of the qualifying requirements. This will include wage increment, job creation, job redesigns or training for existing staff.
Qualifying project cost that is related to software and equipment, third party consultancy and internal manpower can be supported. As announced during the Supplementary Budget 2020, for the period 1 April 2020 to 31 December 2020, the maximum level of support will be enhanced to 80%. For businesses that have been very badly affected by the COVID-19 pandemic, the maximum level of support may even be raised to 90%, depending on a case-by-case review.
To qualify for EDG, companies must fulfil the following conditions: -Be registered and operating in Singapore -Have a minimum 30% local shareholding with Company’s Group annual sales turnover less than S$100 million, OR less than 200 employees -Be in a financially viable position to start and complete a project Should you require more information on the application process for the Enterprise Development Grant, please contact Woon at 9824 1643 or email woon@361dc.com.
