Businesses have been reminded that from Aug 1, the Productivity and Innovation Credit (PIC) cash payout rate will be at 40 per cent instead of 60 per cent of qualifying expenditure, subject to a total expenditure cap of $100,000 across the six qualifying activities.
The other PIC component of 400 per cent tax deduction on up to $400,000 of spending per year in each of the six activities remains unchanged, the Inland Revenue Authority of Singapore (Iras) said yesterday. The PIC scheme expires after Year of Assessment (YA) 2018.
Compulsory online applications for PIC cash payout at mytax.iras.gov.sg will also take effect from Aug 1. These changes were announced during Budget 2016.
Businesses which have incurred the qualifying expenditure before Aug 1 will qualify for the 60 per cent cash payout as long as they e-file their YA 2017 PIC cash payout applications by April 18, 2017, for sole proprietors and partnerships, and Dec 15, 2017, for companies.
Businesses are responsible for the authenticity and accuracy of their claims regardless of whether they file the claims on their own or with the help of consultants or vendors, Iras said. It reminded businesses not to be misled by incorrect information about PIC claims from third parties, such as outdated marketing materials showing the old cash payout rate of 60 per cent for PIC-qualifying expenses incurred from Aug 1. Businesses can refer to Iras' website for information on whether an expenditure qualifies for the 60 per cent payout rate.