The subsidized claim has been reduced from 60% to 40%, effective from 1 Aug 2016. To keep things short and sweet, here’s the summarized gist.
Non-qualifying costs include web hosting services; website updates, support and maintenance.
PIC claim is still very much alive, though the bonus has ended
Qualifying website development costs example
- Domain name registration
- Website design and development costs
- Web applications and software development costs
- Server and hardware
The Singapore government is qualifying claims with funding up to SGD$60,000 of PIC cash payout per year of assessment (YA)
; in addition to the PIC Bonus, a dollar-for-dollar matching grant of up to SGD$15,000 (announced 2014).
2014 Budget speech, Finance Minister Tharman Shanmugaratnam announced..The Productivity and Innovation Credit (PIC) scheme is due to expire in Year of Assessment (YA) 2015. There have been many calls for its extension. I have decided to extend the PIC scheme for another three years until YA2018. This extension will cost the Government a total of $3.6 billion.
Credits to our local government for coming up with these generous goodies (initiated in 2010 budget, further enhanced in subsequent years) to help business enterprises, specifically small medium enterprises (SME) in Singapore, maximize savings and accelerate forward in innovation and productivity.
Does website design and development qualify?
Direct from IRAS, updated on 12 Mar 2014.
From YA 2014 to YA 2018, website will be included as a prescribed PIC automation equipment. Accordingly, website development costs, including costs incurred for the one-time registration of a domain name for the website, will qualify for PIC from YA 2014 to YA 2018.
Website development includes our customized eCommerce, content management system (CMS) and web applications.
If you feel your static site is nothing more than just a domain space, you seriously want to consider revamping it or refocusing a new website that really improve your conversion rates, leads generation, productivity and digital presence.
During the PIC Bonus, sales pitch like “getting a website free with extra cash incentives” were common.
The above headline is blatant but true. While it’s all too easy for local businesses to get excited and overlook the objective behind these incentives, let’s be responsible and appreciative by first understanding the objective of PIC.
The PIC grant and PIC Bonus helps local businesses (sole-proprietorship/s, partnerships, branches and subsidiaries with the parent or holding company being a foreign incorporated company are also eligible for the PIC scheme) improve and invest in their productivity and innovation.
Support from the Singapore government with IRAS being the administrator, is provided in the form of 400% tax deduction/ allowances and/ or Cash Payout for expenditure in any of the six qualifying activities.
From YAs 2013 to 2015, businesses may also enjoy a PIC Bonus, a dollar-for-dollar matching cash bonus given on top of the existing 400% tax deductions/ allowances and/ or cash payout.
Investment holding companies do not qualify for PIC as they are not carrying on a trade or business for tax purposes.
Intro to Singapore PIC Grant (to qualify)
Who Qualifies for PIC Claim?
- Sole-proprietorship, partnerships and companies (SME inclusive) that have active business operations in Singapore;
- At least 3 local employees (Singapore citizens or Singapore permanent residents with CPF contributions) excluding sole-proprietors, partners under contract for service and shareholders who are directors of the company. A business is considered to have met the 3-local-employee condition if it contributes CPF on the payroll of at least 3 local employees:
- Incurred at least $5,000 in PIC-qualifying expenditure during the basis period for the YA in which a PIC Bonus is claimed.
The 6 qualifying productivity improvement activities covered under Productivity Innovation Credit, PIC funding are:
- Purchase or leasing of PIC IT & Automation Equipment
- Training of employees
- Acquisition of Intellectual Property Rights
- Registration of patents, trademarks, designs and plant varieties
- Research and development activities
- Design projects approved by Design Singapore Council
Examples of items that do not qualify under prescribed IT & automation equipment and
cannot *maybe not claimable:
- Renovation and refurbishment costs
- Furniture and fittings
- Refrigerated display
- Refrigerator, chiller, freezer
- Aircon unit bought from retail shops
- Automobile, motorcycle, vehicles
- CCTV cameras, digital cameras, camcorders
Do not falsify any invoices for PIC claim, the penalty for the false claim will be greater than what you will receive in the end. *Approval for equipment that do NOT fall under the prescribed PIC IT and Automation Equipment List, will be on case-by-case basis as stated by IRAS. All information is subjected to change due to changes in government policy and approval. No agencies in Singapore can guarantee 100% approved PIC grant, cash payout claim and bonus funding.
Our web design and development solutions are align with Singapore’s push for productivity and innovation improvement for businesses. Talk to us today on how we can help advance your business venture online, while maximizing your investments into savings.Contact Us
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