SINGAPORE: Under Budget 2014, the government will extend the Productivity and Innovation Credit (PIC) scheme for three years to Year of Assessment (YA) 2018 at current support levels.
The PIC scheme is due to expire in YA2015.
The expenditure cap for each activity will be combined across the three years, which means businesses can claim enhanced tax deductions of up to S$1.2 million.
Under the existing PIC benefits, businesses can enjoy 400 per cent tax deductions on up to S$400,000 of expenditure in each of the six qualifying categories, or a 60 per cent cash payout on up to S$100,000 of expenditure for all six qualifying activities.
The government is also introducing a PIC+ scheme for SMEs, which will help firms with substantial investments aimed at revamping their businesses.
For this, the government will raise the expenditure cap for each of the six qualifying activities from the current S$400,000 to S$600,000 with effect from YA2015.
This means qualifying SMEs that have hit the combined cap of S$1.2 million across three YAs can now claim tax deductions of up to S$1.8 million in expenditure.
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