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On November 27, 2014, Singapore enacted budget proposals announced in the budget 2014 statement ("Budget 2014") through the Income Tax (Amendment) Act 2014 ("Act"). The Act contains tax changes originally proposed in Budget 20142 relating to various incentives for restructuring, such as the productivity and innovation credit (PIC), R&D deductions, and amortization of intellectual property acquisition costs. In addition, Budget 2014 enhances incentives for the financial sector.
Extension of PIC regime. The PIC regime is extended for three years to year of assessment (YA) 2018, i.e., accounting year ending 2017. The taxpayer may claim up to the maximum of S$1.2 million (US$951,000) per qualifying activity based on the qualifying expenditure incurred for YA 2016 to YA 2018. The expenditure cap of S$100,000 (US$79,000) per year for the PIC cash payout cannot be combined across YA 2016 to YA 2018.
Introduction of PIC-plus for SMEs. A PIC plus incentive is introduced to provide support to small and medium- size enterprises (SMEs) that are making more substantial investments to transform their businesses. Under the PIC-plus incentive, the expenditure cap for qualifying SMEs is increased from S$400,000 to S$600,000 per qualifying activity per YA. The...