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PIC Bonus

Tax Benefits

As announced in Budget 2013, for Years of Assessment (YAs) 2013 to 2015, businesses that invest in qualifying activities under the Productivity and Innovation Credit (PIC) scheme will receive a PIC Bonus.

About PIC Bonus

The PIC Bonus gives businesses a dollar-for-dollar matching cash bonus for YAs 2013 to 2015, subject to an overall cap of $15,000 for all 3 YAs combined.

This is given on top of the existing 400% tax deductions/allowances and/or 60% cash payout (“PIC cash payout”) under the PIC scheme. To enjoy the PIC Bonus, businesses must have made a claim for the 400% tax deductions/allowances and/or the PIC cash payout.

The PIC Bonus is taxable.

Qualifying Conditions

Businesses eligible for the PIC Bonus are sole-proprietorships, partnerships and companies that have:

  • incurred at least $5,000 in PIC-qualifying expenditure* during the basis period for the YA in which a PIC Bonus is claimed;
  • active business operations in Singapore; and
  • at least 3 local employees (Singapore citizens or Singapore permanent residents with CPF contributions) excluding sole-proprietors, partners under contract for service and shareholders who are directors of the company.

A business is considered to have met the 3-local-employees condition if it contributes CPF on the payroll of at least 3 local employees:

Where 400% tax deductions/allowances on qualifying PIC expenditure is claimed – in the last month of the basis period for the YA to which the deductions/allowances relates.

Where PIC cash payout on qualifying PIC expenditure is claimed – in the last month of the quarter or combined consecutive quarters to which the cash payout option relates.

* This refers to the amount net of grant or subsidy by the Government or any statutory board.

For more information on the PIC Bonus, please visit the IRAS Website here

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