Claiming PIC For Your Website Design Investment in Singapore (2017 Update)

by Jane T. Digital Marketing Doctor

Many local SMEs have asked if they can cliam PIC for their new website design and development project. Here's more about how you can utilize the PIC for web design and development investment:

Website Development Costs from YA 2014 to YA 2018

PIC (Productivity and Innovation Credit Scheme) benefits may be claimed on capital expenditure incurred on developing a website, including costs incurred for the one-time registration of a domain name for the website.

What is PIC?

The PIC scheme was introduced to encourage productivity and innovation activities in Singapore. It provides support to businesses that make investments to improve their productivity.

2017 Updates:

This post has been extremely popular since it was published in 2016 thus we want to provide important updates to the information about the PIC scheme.

The PIC scheme has benefited many businesses since its introduction and has been instrumental in kick-starting the productivity drive. As announced in Budget 2016, the PIC scheme will lapse after YA 2018. However, businesses may continue to enjoy 100% deductions/allowances on the expenditure incurred subject to existing tax rules.

Businesses may elect for cash payout on qualifying expenditure incurred in the basis period of YA 2018. The eligibility for PIC is determined based on the date when the expenditure is incurred and not the date of submission of the cash payout application.

You can submit your cash payout claim anytime after the end of your financial quarter, but not later than the income tax filing due date of YA 2018.

To qualify for cash payout, your business must:

have employed at least three local employees (Singapore Citizens or Permanent Residents with CPF contributions, excluding sole-proprietors, partners under contract for service and shareholders who are directors of the company) in the relevant month(s); and
carry on business operation in Singapore.

Under the PIC Scheme, businesses enjoy 400% tax deductions/allowances for qualifying expenditure incurred in any of the Six Qualifying Activities from the Years of Assessment (YAs) 2011 to 2018. Eligible businesses can also exercise an irrevocable option to convert qualifying expenditure of up to $100,000 for each YA into cash, at a conversion rate of 60%.

From 1 Aug 2016, the following changes to PIC Cash Payout Scheme will take effect:

1. Reduction of cash payout rate for qualifying expenditure incurred on or after 1 Aug 2016 from 60% to 40% (the cash payout rate is not determined by the date of submission of the cash payout application); and

2. Compulsory e-Filing of cash payout applications. Hardcopy applications will not be accepted from 1 Aug 2016.