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The Productivity and Innovation Credit (PIC) Scheme was introduced in Singapore Budget 2010 and enhanced in Budget 2011 to encourage businesses to invest in a range of six activities along the productivity and innovation value chain.

Under the scheme, all businesses can enjoy 400% tax deduction of the first $400,000 of expenditure in each of these 6 qualifying activities. The scheme will be available from Year of Assessment (YA) 2011 to YA 2015. In addition, eligible businesses have the option to convert up to $100,000 of their qualifying expenditure into a cash payout of up to $30,000. This cash conversion component will be available from YA 2011 to YA 2013.

You can enjoy PIC if you invest in any, some or all of the following six categories of the productivity improvements:

     a) Research and Development
     b) Approved Design
     c) Acquisition of Intellectual Property (IP)
     d) Registration of IP
     e) Purchase/Lease of Prescribed Automation Equipment
     f) Training of Employees

Calculate your PIC Benefits

Further details of the PIC Scheme can be found here ( 192kb).

For Year of Assessment (YA) 2011, companies will receive 20% corporate income tax rebate, capped at $10,000.

Companies that do not have taxable profits will receive a one-off SME Cash Grant amounting to 5% of their revenues in YA 2011, subject to a cap of $5,000. They must, however, have made CPF contributions in the accounting year 2010.

Companies will automatically receive the higher of the Corporate Income Tax Rebate or SME Cash Grant when IRAS assesses their tax returns. These two initiatives are aimed at providing one-off support for companies' increased businesses costs in areas such as rental, wages and utilities.

For a simple estimate of the YA 2011 Corporate Income Tax rebate or SME Cash Grant your company can receive, please click on this link.