Eligible businesses can apply to convert up to $100,000 of their total expenditure in all the six qualifying activities into a non-taxable cash payout.
The cash payout option is to support small and growing businesses which may be cash-constrained to innovate and improve productivity.
The maximum cash payout is calculated as follows:
| Year of Assessment (YA) | Expenditure Cap for All Qualifying Activities | Conversion Rate | Maximum Cash Payout |
|---|---|---|---|
2011 and 2012 | $200,000* | 30% | $60,000 |
2013 to 2015 | $100,000 per YA | 60% | $60,000 per YA |
Conditions for cash payout
Businesses eligible to apply for the cash payout are sole-proprietorships, partnerships, companies (including registered business trusts) that have:
- incurred qualifying expenditure and are entitled to PIC during the basis period for the qualifying YA;
- active business operations in Singapore; and
- at least 3 local employees (Singapore citizens or Singapore permanent residents with CPF contributions) excluding sole-proprietors, partners under contract for service and shareholders who are directors of the company.
A business is considered to have met the 3-local-employees condition if it contributes CPF on the payroll of at least 3 local employees in the relevant month.
What to note when applying for cash payout
- Once the qualifying expenditure is converted to cash, it cannot be claimed as tax deduction/allowances.
- Election to convert qualifying expenditure to cash is irrevocable.
- The minimum qualifying expenditure for each application is $400.
- Qualifying expenditure to be converted to cash is the amount net of grant or subsidy by the Government or any statutory board, and includes grant or subsidy pending approval.
Download FAQ about Productivity Innovation Credit (PIC) Cash Payout