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How Much Can My Company Claim For The PIC Incentive?

There Are 2 Options Within The PIC Incentive - Tax Deductions OR A Cash Payout.

1) 400% Tax Deductions / Allowances

Businesses can enjoy 400% tax deduction/allowances on up to $400,000 of their expenditure per year in each of the six qualifying activities, instead of the 100% deduction/allowances under the existing tax rules.

The annual expenditure cap of $400,000 may be combined as follows:

  • Year of Assessment (YA)

  • 2013 to 2015 (Combined)
  • 2016 to 2018 (Combined)
  • Expenditure Cap per Qualifying Activity

  • $1,400,000
  • $1,800,000
  • Tax Deduction per
    Qualifying Activity

  • $5,600,000 (400% * $1,400,000)
  • $7,200,000 (400% * $1,800,000)

Note: A company claiming can receive a total of 400% tax deductions/allowances (comprising 100% normal deduction and 300% tax deduction) on the qualifying expenditure. Do not claim 400% additional tax deductions on the expenditure which has already been deducted as an expense (100% normal deduction) against the income. This results in an erroneous claim of 500%

2) Cash Payout Option
  • Year of Assessment (YA)

  • 2011 and 2012 (Combined)
  • 2013 to 2015 (Cap cannot be combined)
  • 2016 to 2018 (Cap cannot be combined)New!
  • Expenditure Cap for All per Qualifying Activity

  • $200,000*

  • $100,000 per YA

  • $100,000 per YA
  • Cash Payout Rate

  • 30%

  • 60%

  • 60%
  • Maximum Cash Payout

  • $60,000 (30% * $200,000)
  • $60,000 per YA (60% * $100,000)
  • $60,000 per YA (60% * $100,000)

Small and growing businesses with cash constraints have the option to convert their qualifying PIC expenditure into a cash payout to invest in technology or upgrade their operations.

The expenditure cap for PIC cash payout will remain at $100,000 of qualifying expenditure per YA.

This cash conversion option will be from YAs 2011- 2015.

PIC Cash Bonus

For both options 1 and 2, as long as the qualifying expenditure exceeds $5,000, an additional benefit of dollar for dollar matching will be paid out up to $15,000.

Examples:

  • Qualifying expenditure of $4,000 - $0 bonus paid out
  • Qualifying expenditure of $10,000 - $10,000 bonus paid out
  • Qualifying expenditure of $15,000 - $15,000 bonus paid out
  • Qualifying expenditure of $20,000 - $15,000 bonus paid out

Depending on your financial year end this might be the last month for you to claim this PIC Bonus of $15,000 , do not miss out on this opportunity!


All of our training and professional services are PIC Incentive claimable.

When Do I Apply For The PIC Incentive?

To claim for tax deduction or allowances under PIC, the qualifying expenditure must be incurred during the basis period for YAs 2013 – 2015. The basis period refers to your accounting period ending in the year before the YA, e.g.:

My company’s financial year will end on 31 Dec 2012 (YA 2013). When can I apply for the cash payout? If so, when will I receive the cash payout?

As announced in Budget 2012, companies can now opt for PIC cash payout on a quarterly basis. This means that you can now apply for the cash payout by submitting the PIC Cash Payout Application Form any time after the end of each financial quarter by 30 Nov 2013 (income tax filing due date for YA 2013).

For example, in July 2012, you can claim your cash payout on qualifying expenditure incurred during the financial quarter from 1 Apr 2012 to 30 Jun 2012. If you submit the PIC Cash Payout Application Form on 15 July 2012 and the claim is approved, you will receive the cash payout by 15 Oct 2012. IRAS generally disburses cash payout within 3 months of receipt of application forms.

In Jan 2013, you can submit your cash payout claim again on qualifying expenditure incurred during the financial quarter from 1 Oct 2012 to 31 Dec 2012.

With the introduction of the new PIC+ scheme after the announcement of Budget 2014, you can continue to claim your cash payout on the qualifying expenditure incurred until YA2018.


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