Setting up of a business and running it is not an easy task to an accomplice. We expect proper help and support in the initial stages of business set-up to be able to make it profitable. Singapore is a country which provides ample support and even gives almost 400% tax relaxation for any small businessman dealing in PIC. Singapore is a small country in the Southeast Asia and is known for the ease of business that it offers to various businessmen, both in-house and foreign. The country is only 137 km from the equator and has a very uniform climate all over the year. The monsoon is good and the relative humidity is on the higher side. The climate is complimented with the friendly initiative by the Government and has created an admirable way of doing business. The PIC initiative has been a success as more people are trying to set up their own venture. Before dwelling any further on the improvement it has brought to the lives of these businessman, let us get a better understanding of the systems that have boosted the economy of Singapore to an advanced position.
PIC Claim – Why it is a success?
Any company or business initiatives can register for the PIC claims in Singapore which is trying to work on the development and progress of the six Government quality activities. The firms can claim tax deductions up to 400% of the profit and even can opt for 60% of it as a cash payment. Naturally, any business trying to make its mark in this field can expect a good return and profitability when investing. Moreover, the scheme helps a lot as the number of such businesses is on a rise.
PIC Claim – How does it work?
PIC or Productivity and Innovation Credit Scheme is a step taken by the Government of Singapore in 2010 and the regulations and grants are modified in subsequent years. The scheme caters specifically to the small and medium scale enterprise and businessmen by providing a lot of tax reliefs and other financial help. The tax deductions are 400% which is also applicable to allowance and it can opt in cash to almost 60% which has been reviewed to 40% recently.
The scheme allows individuals with the six quality business identified by the Government. These are.
- Design projects approved by Design Singapore Council
- Acquire and lease PIC information technology and automation equipment
- Training of Employees
- Acquire and lease intellectual property rights
- Research and development activities
- Registration of patents, trademark, designs and plant varieties.
The total financial calculations are done for the budget year and the taxable income is determined. The tax deductions are enjoying huge benefits and more entrepreneurs are flocking the job market with their business ideas.
Let us see how each of the six fields works and what are the areas they supposedly excel to apply for the PIC Scheme.
- Any physical production requires a design. The Government provides all the benefit of any the design that is made in-house or outsourced to any party. It takes care of the cost incurred by the firm to finally submit the design for further actions.
- Any purchase or lease of computers, software or hardware and outsourcing them to any other company will make you eligible for the scheme.
- Any cost borne by the company for skill up gradation of its employees through in-house or external training is also appreciated.
- Any patented r copyright material is costly. The government pays the business which does this by providing grants under this scheme which takes care of all the expense that has incurred for buying patented and copyright materials.
- For any country to make progress, research and development of the existing technologies is a must. The government has identified it to be one of the major sectors where it has decided to focus more. Thus any cost that the company has carried out can be eligible under this scheme for validation and approval.
- Similar to the research and development sector, it is also very important to preserve the cultural and technological milestones that have already been done, as well as the natural resources. The Government provides enough initiative to those who go to the patent office to get their patent registered.
Checklist for PIC Scheme
Though a lucrative scheme by the government, you should be aware of a few facts before you submit your application form for consideration. Always remember to take proper care and understanding the basics of the rule will make the process easier and faster both you and the government.
- You should know the components and the expenditure of the requirement properly. Submitting a form for something else while you did business in some other area won’t help and application may get rejected.
- You must fill the form thoroughly and completely. No incomplete forms are entertained. Submission of forms without completing it will result in wastage of time.
- Always provide enough documents as a proof of your claim. The documents help with the intricacies of the system and make your claim more valid.
- Always be clear about your income and what the extent of the qualifying amount is. The PIC scheme works only for the qualifying amount and not the total income you had.
PIC claim is a very good way of doing business which benefits both the government and the business man. The overall development of the country also improves dramatically. The Government can always find latest technologies and equipment at their disposal while the firms get the financing done in a way which will provide the extra investment for them.
The government is wary of any miscalculations that you have so, making false claims or claiming more than what you deserve may land you in trouble. You can get the application or the claim rejected or worse, while you may also lose credibility. Understanding and enjoying the scheme is beneficial if know the rules properly.