Singapore Productivity and Innovation Scheme

1
PRODUCTIVITY ANDINNOVATION SCHEME
2
PRODUCTIVITY AND INNOVATION SCHEME
It pays to be
productive
You can get up to 400 tax deduction under PIC.
Invest in any ofthese 6 categories to take
advantage of the tax savings scheme.
Purchase / lease of PIC Automation Equipment
Includes computer, laptop, printer, fax machine,
and office systemsoftware.
Training of Employees
Cost spent on internal Workforce Skills
Qualification courses forstaffs skills
upgrading.
Acquisition of Intellectual Property
Cost of patented technology for use in
manufacturing process Pricepaid for trademark
and copyrights.
Registration of Intellectual Property
Costs incurred to register patents, trademarks,
designs and plantvarieties
Research Development
Salaries for RD personnel and fees to RD
institutes foractivities undertaken.
Approved Design Projects
Fees to engage in-house qualified designers or
outsourced toapproved design services providers
to carry out approved designactivities.
Last updated on February 19, 2013
Copyright 2013 Rikvin Pte Ltd
3
OPTION 1 PIC - CASH PAYOUT OF UP TO S60,000
To support small and growing businesses which may
be cash-constrained, to innovate and
improveproductivity, businesses can exercise an
option to convert their expenditure into a
non-taxable cash payout.They can convert up to
S100,000 (subject to a minimum of S400) of
their total expenditure in all the sixqualifying
activities into cash payouts.
An eligible business can opt to convert 60 of
qualifying PIC expenditure (capped at S100,000)
into a non-taxable cash payout, amounting to
S60,000 per YA.
Claimable any time after the end of each
financial quarter, but no later than the due date
for the filing of its income tax returns for the
relevant year. Businesses may obtain the first
quarterly cash payout starting July 2012.
Eligibility criteria
Businesses that can opt for the cash payout are
sole-proprietorships, partnerships,
companies(including registered business trusts)
that have
Last updated on February 19, 2013
Copyright 2013 Rikvin Pte Ltd
4
OPTION 2 TAX CREDIT FOR UP TO S1.2 MILLION FOR
EACH QUALIFYING ACTIVITIES
The Productivity and Innovation Credit (PIC)
Scheme has been further enhanced for Singapore
Budget2011. It is a scheme to provide tax
incentives so as to encourage businesses to
invest and upgrade alongthe innovation value
chain. The table below outlines the benefits of
the PIC
Before PIC
Currently, businesses can typically deduct their
expenses atcost i.e. 100 as part of the general
tax regime.
Tax savings S100,000 x 17
A er PIC
Businesses can now enjoy 400 deduc on on the
cost ofthe same expenditure.
Tax savings S400,000 x 17
Expenditure Deduc ons
TAX SAVINGS
Brief description of qualifyingexpenditures
under the PIC
Total deductions/allowances under thePIC (as a
of qualifying expenditure)
Qualifying activities
Acquisition or Leasing of Prescribed
Costs incurred to acquire/lease
Automation Equipment
prescribed automation equipment
Training Expenditure
Costs incurred on
In-house training (i.e. SingaporeWorkforce
Development Agency
(WDA) certified, Institute of
TechnicalEducation (ITE) certified or
400 allowance or deduction forqualifying
expenditure subject to theexpenditure cap, 100
allowance ordeduction for the balance
expenditureexceeding the cap
All external training.
Acquisition of Intellectual PropertyRights
(IPRs)
Costs incurred to acquire IPRs foruse in a trade
or business (excludeEDB approved IPRs and IPRs
relatingto media and digital entertainmentconten
ts)
Registration 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
activities are primarily done in Singapore
400 tax deduction for qualifyingexpenditure
subject to the expenditurecap. For qualifying
expenditureexceeding the cap for RD done
inSingapore, deduction will be 150. Forbalance
of all other expenses, includingexpenses for RD
done overseas,deduction will be 100
Research Development (RD) Costs incurred on
staff, costs and
consumables for qualifying RDactivities carried
out in Singapore oroverseas, if the RD done
overseas isrelated to the taxpayers Singapore
tradeor business
Notes
Total expenditure cap for YA 2011 and YA 2012 -
800,000 for each of the six qualifying
activities.Total expenditure cap for YA 2013 to
YA 2015 - 1,200,000 for each of the six
qualifying activities.
Last updated on February 19, 2013
Copyright 2013 Rikvin Pte Ltd
5
PRODUCTIVITY AND INNOVATION CREDIT CLAIMS CHART
Estimated Taxable
Estimated Tax
Effective Tax
Total Qualifying
Total PIC Claim
Effective Tax
Income
Payable
Rate
Expenditure
(400)
Payable
(Combined limit of
(after PIC claim)
all Six Activities for
YA 2013 - 2015)
100,000
8,075
8.10
25,000
100,000
0
200,000
16,575
8.30
50,000
200,000
0
300,000
25,075
8.40
75,000
300,000
0
400,000
42,075
10.50
100,000
400,000
0
500,000
59,075
11.80
125,000
500,000
0
600,000
76,075
12.70
150,000
600,000
0
700,000
93,075
13.30
175,000
700,000
0
800,000
110,075
13.80
200,000
800,000
0
900,000
127,075
14.10
225,000
900,000
0
1,000,000
144,075
14.40
250,000
1,000,000
0
2,000,000
314,075
15.70
500,000
2,000,000
0
3,000,000
484,075
16.10
750,000
3,000,000
0
4,000,000
654,075
16.40
1,000,000
4,000,000
0
5,000,000
824,075
16.50
1,250,000
5,000,000
0
6,000,000
994,075
16.60
1,500,000
6,000,000
0
7,000,000
1,164,075
16.60
1,750,000
7,000,000
0
8,000,000
1,334,075
16.70
2,000,000
8,000,000
0
9,000,000
1,504,075
16.70
2,250,000
9,000,000
0
9,600,000
1,606,075
16.70
2,400,000
9,600,000
0
11,000,000
1,844,075
16.76
2,750,000
11,000,000
0
12,000,000
2,014,075
16.78
3,000,000
12,000,000
0
13,000,000
2,184,075
16.80
3,250,000
13,000,000
0
14,000,000
2,354,075
16.81
3,500,000
14,000,000
0
15,000,000
2,524,075
16.83
3,750,000
15,000,000
0
16,000,000
2,694,075
16.84
4,000,000
16,000,000
0
17,000,000
2,864,075
16.85
4,250,000
17,000,000
0
18,000,000
3,034,075
16.86
4,500,000
18,000,000
0
19,000,000
3,204,075
16.86
4,750,000
19,000,000
0
20,000,000
3,374,075
16.87
5,000,000
20,000,000
0
21,000,000
3,544,075
16.88
5,250,000
21,000,000
0
22,000,000
3,714,075
16.88
5,500,000
22,000,000
0
23,000,000
3,884,075
16.89
5,750,000
23,000,000
0
24,000,000
4,054,075
16.89
6,000,000
24,000,000
0
25,000,000
4,224,075
16.90
6,250,000
25,000,000
0
26,000,000
4,394,075
16.90
6,500,000
26,000,000
0
27,000,000
4,564,075
16.90
6,750,000
27,000,000
0
28,000,000
4,734,075
16.91
7,000,000
28,000,000
0
28,800,000
4,870,075
16.91
7,200,000
28,800,000
0
Last updated on February 19, 2013
Copyright 2013 Rikvin Pte Ltd
6
Helpful Links
Company RegistrationSingapore Work
VisasBusiness ServicesAccounting
ServicesOffshore Company
RIKVIN PTE LTD
20 Cecil Street, 14-01, Equity Plaza, Singapore
049705
Main Line
(65) 6320 1888
Fax
(65) 6438 2436
Email info_at_rikvin.comWebsite
www.rikvin.com
Reg No 200100602K
EA License No 11C3030
This material has been prepared by Rikvin for the
exclusiveuse of the party to whom Rikvin
delivers this material.This material is for
informational purposes only and hasno regard to
the specific investment objectives,
financialsituation or particular needs of any
specific recipient.Where the source of
information is obtained from thirdparties,
Rikvin is not responsible for, and does not
acceptany liability over the content.
Copyright 2013 Rikvin Pte Ltd