Excerpt from IRAS.GOV.SG
21 Jul 2016: IRAS would like to remind all businesses that with effect from 1 Aug 2016, the Productivity and Innovation Credit (PIC) cash payout rate will be at 40% instead of 60% of qualifying expenditure subject to a total expenditure cap of $100,000 across the six qualifying activities . The other PIC component of 400% tax deduction on up to $400,000 of spending per year in each of the six activities remains unchanged. The PIC Scheme will expire after Year of Assessment (YA) 2018.
Compulsory online applications for PIC cash payout at mytax.iras.gov.sg will also take effect from 1 Aug 2016.
These changes were announced earlier in Budget 2016.
No need to rush to claim PIC cash payout before 1 Aug
Businesses who have incurred the qualifying expenditure before 1 Aug 2016 will qualify for the 60% cash payout as long as they e-File their YA 2017 PIC cash payout applications by 18 Apr 2017 for sole-proprietors and partnerships, and 15 Dec 2017 for companies.
Businesses are responsible for accuracy of PIC claims
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 would like to remind businesses not to be misled by incorrect information about PIC claims from third parties, for example outdated marketing materials showing the old cash payout rate of 60% for PIC-qualifying expenses incurred from 1 Aug 2016. Businesses can refer to IRAS’ website for information on whether an expenditure qualifies for the cash payout rate of 60%.
Get ready for compulsory online application for PIC cash payout
From 1 Aug 2016, application for PIC cash payout can only be made online at mytax.iras.gov.sg. IRAS will not accept hard-copy applications from that date.
Company directors and partners will first have to authorise themselves, their employees or third parties, such as tax agents, for ‘PIC cash payout matters’ via e-Services Authorisation System (EASY). The authorised person must have activated his SingPass 2-Step Verification (SingPass 2FA) before he can log in to mytax.iras.gov.sg to apply for PIC cash payout.