Small-and-medium-sized enterprise (SME) owners operating in Singapore need to acquaint themselves with the Productivity and Innovation Credit (PIC) Scheme – a great initiative by the government that helps to alleviate the cost of doing business while improving efficiency.
Introduced at the Budget announcement in 2010, it aims to help SMEs boost their productivity and overcome cash flow challenges to be more innovative. Managed by the Inland Revenue Authority of Singapore (IRAS), the Scheme is set to expire after the 2018 Year of Assessment, which is why if you have not made any claims against it, you should do so soon.
If that isn’t enough to convince you of its usefulness, let us spell it out for you: it allows you to have 400 per cent tax deductions up to a maximum of $400,000, or 40 per cent cash pay-out up to a maximum of $100,000.
There are six qualifying activities that this scheme can help partially foot the bill for:
1. Acquisition and leasing of PIC IT and automation 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 approved by DesignSingapore Council
In 2014, the government launched the PIC+ scheme, targeted specifically at SMEs looking to make more substantial investments to transform their businesses. Under it, you are able to make tax deduction claims up to a maximum of $600,000.
IRAS offers a handy guide here that will provide you with the details of how to go about utilising this scheme.
The tax deductions are claimable when filing your returns. Do note that the due date for sole proprietorships and partnerships is April 15, while that of other types of companies is November 30.
Simple instructions on how to obtain the cash pay-out can be obtained here. IRAS says it takes three months within receiving the complete application to disburse the amount, but it is usually done within six weeks.
If you are looking at ways to optimise your back office operations, know that the services offered by PikoHANA qualify to be reimbursed by the PIC Scheme, since it falls under the first qualifying activity of “acquisition and leasing of PIC IT and automation equipment”.
For starters, adopting PikoHANA’s system could reduce the cost of your back office by up to 50 per cent or more. This will be further offset by the two-part benefit of the PIC Scheme, bringing you even further savings.
Our Platform as a Service (PaaS) covers your Corporate Services, Accounting, Payroll, Tax, Admin and CRM implementation and support. We deploy the best-of-breed cloud technologies based on the Client’s needs that are integrated with PikoHANA’s proprietary business intelligence platform, AO (meaning enlightened or informed in Hawaiian).
PikoHANA deploys the systems; processes all transactions; and ensures you have access to KPIs and operational data in real-time, at any time, allowing you to make informed decisions when running your business, all for a flat monthly fee that doesn’t increase until you grow!
We get it and we get it done!