As announced earlier by the Finance Minister in his maiden Budget 2016 speech that with effect from 1 Aug 2016, the Productivity and Innovation Credit (PIC) cash payout rate is to be reduced to 40% of qualifying expenditure subject to a total expenditure cap of $100,000 across the six qualifying activities. Before this change, the rate was 60%. In addition, the three local employees condition need to be met in order to be eligible to apply for the cash payout.
The other option of 400% tax deduction on up to $400,000 of spending per year in each of the six activities remains unchanged. Businesses can still continue to enjoy this if the benefits of lower tax payable is more than what they may get from the cash payout.
Another important thing to remember is that the PIC Scheme will expire after Year of Assessment (YA) 2018 (for financial year ending in year 2017).
