Productivity Innovation Credit (PIC) 400% Tax Deduction/Allowances

Productivity Innovation Credit (PIC) – 400% Tax Deduction/Allowances

Businesses can enjoy 400% tax deduction/allowances on up to $400,000 of their expenditure per year in each of the six qualifying activities, instead of the 100% deduction/allowances under the existing tax rules.

Year of Assessment (YA)Expenditure Cap per Qualifying Activity*Tax Deduction per Qualifying Activity

2011 and 2012
(Combined)

$800,000

$3,200,000
(400% x $800,000)

2013 to 2015
(Combined)

$1,200,000

$4,800,000
(400% x $1,200,000)

 

For example, a company has a “Gross Taxable Profit” of $1M. It has bought about $100K of IT equipments.

It will enjoy PIC 400% tax rebate of $400k. Thus, it lowered the taxable income to $600k.

Currently, the corporate tax is 17%.  Therefore, there is a tax saving of $68k ($170k – $102) or 68% off  ($68k/$100k).

In summary, the company pay $32k for $100k worth of IT hardware and software.

 

Download FAQs about Productivity Innovation Credit (PIC) – Tax Deferral (Tax Rebate)

 


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