Productivity and Innovation Credit (PIC) Scheme
This scheme was introduced by IRAS to encourage productivity and innovation activities in Singapore. It provides support to businesses that make investments to improve their productivity.
Under the PIC Scheme, businesses can enjoy 400% tax deductions/allowances and/or 60% cash payout for investments made in any of the Six Qualifying Activities from the Years of Assessment (YAs) 2013 to 2018.
Training of Employees
"Training of Employees" is one of the six approved qualifying activities under this scheme.
- Qualifying training costs include training for all employees. It does not matter whether they are local or foreign employees.
- There is no need to obtain prior approval from IRAS for training expenditure to qualify for PIC.
- There is no need to deduct the "Absentee Payroll Funding" to arrive at the qualifying expenditure for PIC. This is because the Absentee Payroll funding is given separately to help employers defray the manpower costs incurred on employees attending training.
"Company A" spends $100k over a period of one year for employee training. After enjoying 70% upfront SSG funding, "Company A" pays $30k to the training provider.
Now here are two ways "Company A" can benefit from this scheme
- 60% Cash Payout Option: 60% x $30k = $18k cash payout
- 400% Tax Deduction Option: (400% x $30k) x 17% corporate tax = $20.4k tax savings
For more details about this scheme, visit IRAS website or PIC Brochure (2015 Edition)