Singapore eCommerce PIC Grant

Get your Singapore ecommerce PIC GRANT

Source: IRAS | Download pdf
For more information visit IRAS website: www.iras.gov.sg

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Singapore PIC Grant - 6 Qualifying Activities

6 Qualifying Activities

1. Acquisition and Leasing of PIC IT and Automatic Equipment
2. Training of Employees
3. Acquisition and Licensing of Intellectual Property Rights
4. Registration of Patents, Trademarks, Designs and Plant Varieties
5. Research and Development
6. Investment in Design Projects
Singapore PIC Grant - What is PIC?

What is PIC Grant?

The PIC scheme supports investment in six productivity improvement activities. From YA 2011 to YA 2018, businesses can enjoy huge tax savings in the form of Cash Payout and/or Tax Deduction. From YA 2013 to YA 2015, businesses can also receive PIC bonus of up to S$15,000
Singapore PIC Grant - How does PIC benefit me?

How Does PIC Benefit me? | Option 1

There are two ways you can benefit from your sending in any of the six qualifying activities.
Option 1: Cash Payout
1. Convert up to S$100,000 of your total spending in all six qualifying activities into a non-taxable cash payout instead of claiming tax deduction
2. This option is generally more beneficial for business with low or no taxable income.
3. The maximum cash payout is S$60,000 (60% x S$100,000) for each YA from YA 2013 to YA 2018

To qualify for cash payout, your business must:
1. have employed at least three local employees (Singapore Citizens or Permanent Residents with CPF contributions, excluding sole-proprietors, partners under contract for service and shareholders who are directors of the company) in the relevant month(s): and
2. carry on business operation in Singapore. From YA 2016 to YA 2018. If you are claiming cash payout on PIC IT and Automation Equipment, the equipment must be used by your business at the point of electing for cash payout.

Singapore PIC Grant - How does PIC benefit me?

How Does PIC Benefit me? | Option 2

1. Enjoy 400% tax deduction on up to S$400,000 of your spending in each of the six qualifying activities per YA. This means a tax deduction of up to S$1.6 million (S$400,000 x 400%) for each activity per YA
2.At the corporate tax rate of 17%, your tax savings can be up to S$272,00 for each activity per YA
3. From YA 2015 to YA 2018, qualifying SMEs can enjoy an additional S$200,000 in qualifying expenditure for each of the six activities per YA. This means is increased to S$600,000
Singapore PIC Grant - PIC Bonus

PIC Bonus

From YA 2013 to YA 2015, PIC Bonus, which is a dollar-for-dollar matching cash bonus will be provided on top of existing PIC benefits. The PIC bonus is capped at S$15,000 over all three YAs combined. The PIC bonus is taxable.

To qualify for PIC bonus in any of the three YAs, your business must
a) have a spent a minimum of S$15,000 on PIC-qualifying expenditure (net of government grant/subsidy) in the basis for that YA (ie. during the financial year):
b) have employed at least three local employees (Singapore Citizens or Permanent Residents with CPF contribution in Singapore.

You do not need to apply for the PIC bonus, IRAS will compute the PIC bonus upon approal of your cash payout claim or upon filling of your income Tax Return. For sole-proprietors/partnerships, a PIC Enhanced Allowance/Deductions Declaration Form needs to be fillied with the income Tax Return.

Singapore PIC Grant - How do I apply?

How Do I Apply?

1. Cash Payout
How to submit:
a) Submit PIC Cash Payout Application Form through myTax Portal (mytax.irs.gov.sg)
When to submit:
b) Anytime after the end of your financial quarter(s), but not later than the filling due date of the Income Tax Return (Form C-S/Form C/Form B/Form P)

2. 400% Tax Deduction
a) For Sole-proprietors/Partnerships
How to submit

Claim tax deduction in "Allowable Business Expenses" of the 4-line statement in your income Tax Return (Form B/Form P). Complete PIC Enhanced Allowances/Deductions Declaration Form for Sole-properietors and Partnerships (www.iras.gov.sg)

When to submit
By the filing due date of 15th April or 18 April (if you e-File Form B/Form P) for the relevant YA

b) For Companies
How to submit

Claim tax deduction in your income Tax Return (Form C-S/Form C)

When to submit
By the filing due date of 30 Nov or 15 Dec (if you e-file your income Tax Return) for the relevant YA)

Singapore PIC Grant - Training of employees

Training of Employees

You can claim PIC benefits on training of your employees for the purposes of the trade and business.

1. External Training
Training of your employees by external service providers

Qualifying Training Costs
a) Course fees
b) Rental of training materials and stationery used for the training
Meals and refreshments provided during the training

2. In-house training
Training of your employees by your in-house trainers
Qualifying Training Costs
a) Salary and other remuneration pad to in-house trainers for conducting the training
b) Rental of training materials and stationery used for the training
Meals and refreshments provided during the training

In housse training must be:
a) A Workforce Skills Qualification (WSQ) training course accredited by the Singapore Workforce Development Agency (WDA) and conducted by a WSQ in-house training provider
b) A course approved by the Institute of Technical Education (ITE) under the ITE Approved Training Centre scheme
c) On-the job training by an on-the-job training centre certified by ITE
c) In-house training not accredited/certified by WDA/ITE (with effect from YA 2012 and subject to spending cap of S$10,000 per YA)

Singapore PIC Grant - PIC IT and Automation Equipment

PIC IT and Automation Equipment

You can claim PIC benefits on costs of acquiring or leasing any PIC IT and Automation Equipment used in your business.

Equipment in Prescribed List of PIC IT and Automation Equipment
1) The PIC IT and Automation Equipment List is available at www.iras.gov.sg
2) Examples from PIC IT and Automation Equipment List:
a) Computer
b) Software
c) Point-of-sale system
d) Computer numerical control (CNC) cutting machine
e) Self-climing scaffold system
f) utomated warehousing equipment and software

Equipment Approved on Case-by-Case Basis
If your equipment is not in the PIC IT and Automation Equipment List, you may apply to IRAS to have the equipment approved for PIC on a case-by-case basis, subject to the following conditions:
a) The equipment automation or mechanises the work process of the business; and
b) The equipment enhances productivity of the business.

Singapore PIC Grant - Other Qualifying Activities

Other Qualifying Activities

1. Registration of Patents, Trademarks, Designs and Plant Varieties
a) Your business must be the legal and economic owner of the intellectual Property Right (IPR)

Qualifying Costs

  • Official fees paid to respective Registry
  • Professional fees forregistration of IPRs

2. Acquistion and Licensing of Intellectual Property Rights (IPRs)
a) Cost in acquiring the legal and economic ownership of the IPR for use in your trade (not applicable to sole proprietorships.)
b) Qualifying cost excludes legal fees, registration fees, stamp duty and other costs related to the acquisition
c) License fees incurred on IPR licensing from YA 2013

Example of IPRs

  • Patents
  • Copyrights
  • Trademarks (Do not qualify for IPR licensing)

3. Research and Development (R&D)

  • R&D refers to any systematic, investigative and experimental study that involves novelty or technical risk carried out in the field of science or technology, to acquire new knowledge or to use the results of the study for the production or improvement of materials, devices, products, produce, or processes.
  • R&D may be conducted by your business or outsourced to an R&D organisation.
  • R&D may be carried out in Singapore or overseas. If the R&D is done overseas, it must be related to your trade in Singapore.
  • R&D cost sharing arrangement qualifies for PIC from YA 2012.

Qualifying Costs

  • Staff costs and consumables for R&D activities carried out by your business
  • 60% of outsourced costs or shared costs deemed to be staff costs and consumables; any percentage above 60% should be substantiated by supporting documents

4. Investment in Design Projects

  • This is administered by DesignSingapore Council.
  • The approved design activities may be conducted by your business or outsourced to an approved design service provider.
  • More details, including how to apply for approval, can be found on Design Singapore Council's website at http://www.designsingapore.org

Qualifying Costs

  • Staff costs of qualified design professional
  • 60% of payments to approved design service provider deemed as cost of qualified designers; any percentage above 60% should be substantiated by supporting documents
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