Taking Advantage of the Productivity and Innovation Credit for Singapore Taxes

Taking Advantage of the Productivity and Innovation Credit for Singapore Taxes

The Productivity and Innovation Credit or PIC has been designed for improved Singapore tax deductions. These deductions allow savings on Singapore taxes on a great deal of expenditures. All business will be able to qualify for these tax credits. These expenditures for these credits include the following:

1. Training - Companies will receive a tax credit of 250 percent of their expenditures on qualified programs to train employees. The credit is good for the first $300,000. After $300,000 has been spent, the remainder is credited at 100 percent as a tax deduction. Those training programs include the following:

a. In house ITE courses issued by a training center that has been approved. It is also known as an ATC or approved training centre.

b. In house WSQ training courses. WSQ stands for Workforce Skills Qualification.

c. On the job training, but it must be from an on the job training centre that has been accredited.

d. Other in house training that has been approved by the Minister.

e. External training (not in house) - covers tuition paid to the providers of the training. This is also known as outsourced training.

f. These benefits are for all types of employees. This includes local and foreign. The training may be conducted overseas, also.

2. Automation equipment - this covers purchase or lease of the equipment. The tax allowance is the same as for the training programs. Installation costs of equipment may also qualify, if they are part of the cost of the equipment.

3. IPR acquisition - this stands for intellectual property rights that are purchased for business. They cannot be related to digital entertainment and media content. This has the same 250 percent tax deduction.

4. Registering intellectual property rights - carries the same deduction as the others.

5. Research and development - This covers routine information gathering and market research and promotions. It is also covers things like testing and quality control. This carries the same 250 percent deduction, except there is a higher deduction on amounts over the $300,000. Whereas the others carry a 100 percent tax deduction, research and development has a 150 percent tax deduction on the balance.

6. Approved trademark or design expenditures - they must be done in Singapore. This does not include people that provide design and trade services.

Qualifying Period

There is a five year qualifying period on which the PIC can be claimed on your taxes in Singapore. It starts in the year YA 2011 and ends in YA 2015 YA means year of assessment. If your fiscal year ends in 2010, you can take the credit for 2010, even though it starts in 2009.

To apply for the credit, it is necessary to fill out the proper form from the IRAS.

Summary

The PIC or Productivity and Innovation Credit allows for enhanced deductions on Singapore taxes for business. It covers things like employee training and purchase and lease of automation equipment. It also covers many expenses for research and development. Businesses can claim 250 percent of approved expenditures (up to $300,000) for five years. Expenses over $300,000 can be claimed at 100 percent. This makes the prospect of starting a new business in Singapore, even more attractive than before. This is great deal more information about Singapore taxation at the website of the IRAS.

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