If you’ve been thinking about purchasing equipment or software to help your business, the PIC scheme might be able to help. The PIC scheme was introduced to encourage businesses to invest in solutions that would help increase productivity and innovation by providing tax benefits, or a cash payout.

What does the PIC scheme provide?

The PIC scheme enables you to enjoy 400% tax deductions/allowances on up to S$400,000 of your qualifying expenditure per year of assessment (YA)

Convert 40% of your total qualifying expenditure to a non-taxable cash payout, capped at S$100,000 per YA, as of 1 August 2016

This means that for every $1 that you spend on any of the 6 qualifying activities, you can either enjoy a $4 deduction on your payable taxes, or receive $0.40 in a non-taxable cash payout.

However, if you are investing more intensively in your business and are spending more than S$400,000, there is the PIC+ scheme for you. Under this scheme, the cap on your 400% tax deduction is raised to S$600,000 per YA.

What are the 6 qualifying activities?

  • Acquisition and Leasing of PIC IT and Automation Equipment
  • Training of Employees
  • Acquisition and Licensing of Intellectual Property Rights (IPR)
  • Registration of Patents, Trademarks, Designs and Plant Varieties
  • Research and Development (R&D) Activities
  • Design Projects Approved by DesignSingapore Council

What can UtoMedia do for me?

If you have been looking to upgrade your website to a powerful portal with e-commerce, customer relationship management, booking and scheduling capabilities, HR and payroll, billing, enterprise resource planning or any other functions, we have the skill set and the experience to collaborate with you to create the solution you need. Or maybe you’ve set up a new company, and want a brand-new website.

Your new portal will be applicable for the PIC scheme under Acquisition and Leasing of PIC IT and Automation Equipment.

Am I eligible for PIC?

According to IRAS, all businesses, including sole proprietorships, partnerships, companies, registered branches and subsidiaries of a foreign parent or holding company, are eligible for PIC! However, you must carry on active business operations in Singapore.

If you are opting for the cash payout instead of tax deduction, your company must have at least 3 local employees excluding sole-proprietors, partners under contract for service and shareholders who are directors of the company. The minimum qualifying expenditure must also be at least S$400.

How do I apply for PIC?

Tax Deductions/Allowances

Claim your deductions/allowances in your Income Tax Return for the relevant YA by the filing due date.

If you are applying for a design project, you will need to seek the DesignSingapore Council’s approval before claiming it in your Income Tax Return.

Cash Payout

  1. Authorise an employee or 3rd party for “PIC Cash Payout Matters” via e-Services Authorisation System (EASY).Note: If you are a sole-proprietor, you can skip this step
  2. Prepare information needed for e-File the application and determine the incurred dates for your PIC qualifying expenditure. This includes the date incurred, PIC qualifying costs excluding GST and grants or subsidies, name of vendor, identification type & number of vendor and description of equipment or software
  3. The authorised employee or 3rd party can then proceed to e-File PIC cash payout application and relevant forms online at mytax.iras.gov.sg

Do all websites qualify for PIC?

YES! All NEW websites qualify for PIC. Previously, only websites that have functions that demonstrably increase productivity and innovation qualify, meaning websites had to include functions such as e-commerce, customer relationship management, booking and scheduling capabilities, HR and payroll, billing, enterprise resource planning or others.

Now, as long as your website is brand-new and is up and running by the time you apply for PIC, it qualifies! And you know what? Web design and development just so happens to be one of UtoMedia’s strengths. 😉 Check out our portfolio to see for yourself!

Can you apply for PIC on our behalf?

As much as we’d like to do it for you, unfortunately, IRAS requires you to apply for it yourself. What we can do for you, however, is guide you on the process. We will furnish you with all the necessary documents and information. Rest assured that all our invoices and quotations will be compliant with PIC requirements to ensure as smooth an application as possible.

How much can I claim?

How much you can claim depends on:

  1. how much you spend and
  2. whether you are claiming as a tax deduction or cash payout

If you decide on a package that costs S$3000, for example, the calculations will be as follows:

Tax deduction

$3,000 x 400% = $12,000
Therefore, you will be able to deduct $12,000 from your total taxable income for the year of assessment. In other words, you don’t need to pay corporate tax on $12,000.

At a corporate tax rate of 17%, this means a savings of:
$12,000 x 17% = $2,040

Cash Payout

$3,000 x 40% = $1,200

Obviously, the tax deduction option is easier to apply for and is worth more, but the cash payout option is good for businesses with tighter cashflow.

I want to go for the cash payout anyway. How long do I have to wait to receive it?

According to IRAS:

IRAS strives to disburse the cash payout within three months of receiving your complete application. In most cases, IRAS processes the applications within six weeks.

IRAS selects a sample of applications for audit. For cases selected for audit, IRAS will request further details and supporting documents for review. We strive to complete the review within three months from receiving the complete information. The processing time may take up to six months, depending on the complexity of each case.

Please note that IRAS may also select PIC applications for further review, even after disbursing the cash payout.

Interested in claiming PIC for your benefit? Our specialists can help you with the application process.