In the recent 2012 Budget Statement, Minister of Finance Mr
Tharman Shanmugaratnam outlined several measures to help businesses
in upcoming times.
Small and midsized enterprises (SMEs) looking to enhance their
productivity can look forward to an improved Productivity and Innovation Credit (PIC)
scheme.
The PIC gives tax benefits to companies investing in automation
equipment and/or activities. These include hardware and software
investments, as well as training.
Cash Payout Option Increased by 100%
If your company is a small and growing business, you can convert
your hardware/software expenditure into a non-taxable cash
payout.
• Increase in cash payout from 30% to 60% for up to $100,000 of
expenditure per YA. This applies for YA2013 to YA2015.
• Cash payouts on a quarterly basis instead of financial year-end
and applies from 1 Jul 2012.
• Claims for in-house training costs will not require external
certification, at a maximum coverage of up to $10,000 a year. This
applies from YA2012.
Alternatively, you can select the 400% Tax
Deduction/Allowances option. For YA 2011 to YA 2015, all
businesses can enjoy deduction/allowances at 400% of their
expenditure on each of the six qualifying activities, listed here.
More information on the PIC and other tax benefits can be found
here on the IRAS website.
Such Budget benefits will prove especially useful for small and
midsized enterprises (SMEs) seeking to improve performance and
growth. So make the most of opportune moments today.
ClCCloud computing payment
(extracted from Page 4 of
11 : PIC FAQ)
Will expenditure incurred on cloud computing qualify for
PIC?
Yes, expenditure incurred on procuring cloud
computing services will qualify for enhanced deduction for PIC
purposes.
Notwithstanding the above, as payments for cloud
computing are payments for services, withholding tax
would apply if such payments are made to non-residents for services
rendered in Singapore.
12. Do I need to give a breakdown of the
cloud computing payment?
No. The full cloud computing payment will
qualify for PIC.
13. I am a cloud computing vendor. Will
my expenditure incurred on PIC Automation Equipment used in the
provision of cloud computing services to my customers qualify for
PIC?
Expenditure incurred to acquire/lease
hardware
The expenditure you incurred to acquire/lease
PIC Automation Equipment (hardware) will qualify for PIC, provided
the hardware falls within the
PIC Automation Equipment list.
Expenditure incurred to acquire/lease
software
Your expenditure to acquire/lease software will
not qualify for PIC. Only the cloud computing
customers, who are the end-users of the software, can claim the PIC
benefits.
Expenditure incurred to develop
software
If you develop the software, you can claim PIC on qualifying
expenses incurred to develop the software provided the project
qualifies as Research and Development.