It’s not too late to realise considerable tax savings for training, lease or purchase of IT and automation equipment, R&D, IP and other qualifying expenditures under Singapore’s soon-to-expire Productivity and Innovation Credit Scheme (PIC). Be prepared, however; tax authorities will be keeping a close eye on all incoming claims. You will also have to act fast; the program terminates for good at the end of your 2017 financial year.
PIC allows companies to deduct up to 400 per cent of the value of qualified expenditures to reduce their taxes. Alternatively, a company can convert up to $100,000 of qualified expenditure into a non-taxable cash payout at 40 per cent of that value. So the benefits can be considerable.
To take advantage, however, you will want to make sure that your claim meets all applicable rules and guidance from the IRAS. As a general rule of thumb, for example, you will want to make sure that both payment and delivery of any qualified products or services occurs before the close of your 2017 financial year.
How might this apply in the real world? Let us say that your company signs an agreement in September, 2017 for employee training on a new business process. While you make full payment upon the contract’s signing, the training itself does not occur until August of 2018. In such a case, the IRAS will likely treat the training as not qualified for PIC.
If you are still in your 2017 financial year, you can still realise tax savings under PIC. If you have moved on to 2018, the window of opportunity is closed.
Other restrictions may apply to your particular tax situation. Additional information on PIC can be found here.