PIC Grants in Singapore

The economy of a country is mostly determined by the innovation majorly in its business sector. The entrepreneurs who invest in the business sector are vital in increasing the country’s economy. These investors need grants in some situations in order to boost their productivity level. Many grants are available and one of them is the Productivity and Innovation Credit grants, PIC grants. The government and other institutions like IRAS (Inland Revenue of Singapore), offer grants to innovators in order to enhance the economy of Singapore. Every innovator needs to understand the basic facts on PIC.

These include;

1. What is PIC and who is eligible for it?
Productivity and Innovation Credit was initiated in Singapore in the 2010 Budget in order to offer considerable tax deductions for investments in a number of activities down the value chain of innovation. PIC grants are aimed at heartening small to standard enterprises to tap on the PIC schemes in order to invest in innovation as well as productivity.

Basically, every business is eligible for the grant, however, they must have incurred expenses in whichever of the 6 qualifying activities which are;
• Training of employees in different fields
• Acquiring and Leasing of PIC Information Technology and Automation Equipment
• Attainment and In-licensing of Intellectual Property Rights
• Registering patents, designs, plant varieties and trademarks
• Designing of projects that have been approved by the Singapore Council, and
• Researching and developing activities.

2. What different types of Business Options are available in Singapore?
There are only 2 business options in Singapore as outlined below;
• 400 % Tax Deduction
• Cash Payout Option

3. The Qualifying Period
The scheme is operational for a period of 5 years beginning YA 2011 to YA 2015, being extended to YA 2018 after the Budget announcement in Feb 2014. For instance, if a business has acquired qualifying expenditure in Nov 2014 and their accounting year ends on 31st December, 2014, then they qualify to claim PIC in their Income tax Return for the Year of Assessment, 2015.

4. What are the conditions for cash Payout?
The businesses that are eligible to request for the cash payout are partnerships, sole-proprietorships or companies that have;
• Business operations that are active in Singapore ( i.e. generated revenue)
• Earned qualifying expenses and are permitted to PIC in the main period for the qualifying Year of Assessment, and
• CPF contribution has been made for the last 3 months of the period that PIC claim has been made, for a minimum of 3 local employees of Singapore Citizenship or Singapore Permanent Residents, excluding Sole-proprietors, shareholders who are directors of that company and partners.