As announced during the recent Singapore Budget Statement, the Productivity and Innovation Credit (PIC) Scheme encourages businesses to upgrade their capabilities by providing Singapore corporate tax incentives on a wide range of activities along the innovation and productivity value chain.
Singapore Company Registration specialist Rikvin is optimistic that the newly-enhanced PIC Scheme will give small and growing Singapore businesses – especially those registering intellectual property (IP) – the opportunity to increase their competitiveness and enjoy substantial tax savings in the same swoop.
In addition, the PIC cash payout option has been introduced to support small and growing cash-constrained business that have opted for Singapore company formation. These businesses can now exercise an option to convert their expenditure into a 60% cash payout when they spend on six qualifying PIC activities.
Two of the six qualifying activities under the enhanced PIC Scheme include the acquisition and registration of Intellectual Property Rights (IPRs). After registering a company in Singapore, a business owner who wishes to register IPRs will not only be able to protect his creations from being misused by other parties but enjoy massive tax savings or a cash payout as well.
“This is certainly music to the ears of business owners who want to but find it hard to fund such IP-related initiatives. Many businesses are starting to recognise the importance of registering intellectual property. Our newly-established trademark registration division, which facilitates these procedures, anticipates that businesses will register their trademarks in Singapore in a bid to tap savings offered via the PIC Scheme,” said Mr. Satish Bakhda, Head of Rikvin’s Operations.
In gist, Singapore firms that 1) invest in IP-registration and acquisition for use in a trade or business or 2) spend on the registration process of patents, trademarks, designs and plant varieties stand to enjoy the following:
- a 400% allowance of the costs incurred to acquire IPRs (subject to an expenditure cap).
- a 100% allowance will be awarded for any balance expenditure which exceeds the cap.
Examples of such expenditure include the fees to purchase of a patented technology for production processes or the costs involved to buy a trademark.
“We are glad that the government is introducing such improved tax benefits. In this highly competitive economy, owning IPRs will allow businesses to set themselves apart from their competitors. In light of the PIC Scheme, we anticipate that more innovative firms to opt for Singapore company setup. We also stand committed to helping our clients attain greater heights in their businesses by advising them accordingly and giving them access to our entire suite of services,” affirmed Mr Bakhda.