The PIC scheme has expired after the Year of Assessment (YA) 2018. Businesses are not allowed to claim PIC benefits on expenditure incurred after the basis period of YA 2018.
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IT and automation equipment that qualify for PIC benefits are those prescribed in the PIC IT and Automation Equipment List (PDF, 246KB). Businesses that invest in equipment that are not in the prescribed list but automate or mechanise their business processes and enhance productivity may apply to IRAS to have their equipment approved for PIC on a case-by-case basis.

When to Submit Application for Case-by-Case Approval

Businesses do not need to seek case-by-case approval from IRAS prior to incurring the expenditure for IT and automation equipment that is not found in the prescribed list (PDF, 246KB). However, businesses must obtain case-by-case approval of the said equipment before applying for PIC cash payout or claiming PIC enhanced deductions/ allowances in their Income Tax Return. The case-by-case application must be submitted to IRAS no later than 2 months before the Income Tax Return filing due date. The deadline for case-by-case applications is:

Business Type Due Date
Companies 30 Sep
Sole-proprietors/ Partnerships 28 Feb

For businesses that wish to obtain case-by-case approval prior to incurring the IT and Automation equipment expenditure for greater certainty that the equipment purchased qualifies for PIC benefits, they must submit their applications by the cut-off dates (PDF, 87KB) to allow sufficient time for IRAS to process these applications.

Criteria for Case-by-Case Approval

From YA 2013, IRAS grants approval of IT and automation equipment on a case-by-case basis if all the following criteria are met:

  1. The equipment automates or mechanises the business' work process(es); and
  2. The equipment enhances productivity of the business (e.g. reduced man-hours, more output or improved work processes).

IRAS evaluates each application based on the criteria described above. The outcome of our evaluation may differ entity to entity, depending on the existing level of automation or mechanisation in the business.

Example 1 – Rubber Trimming Machine

Existing method: The current method in the company's rubber manufacturing process is to have an operator trim the rubber manually with a rotating grinder.

New method: This machine replaces the operator and performs high-speed rubber trimming based on pre-configured machine settings.

Does the machine:

Automate/ Mechanise the Work Processes? Improve Productivity of the Business?
Yes, as it now performs the work previously done by the operator. Yes, as the number of units trimmed per day has increased without added manpower.

Example 2 – Hydraulic Guillotine Shear

Existing method: Workers use gas cutting torches and manual saw machines to cut the metal sheets. This method results in uneven line cuts and rough edges which require constant refining using a manual saw.

New method: This machine is used to provide a straight and clean cut across large metal sheets automatically. It removes the need for manual cutting and refinements of the rough/ uneven edges.

Does the machine:

Automate/ Mechanise the Work Processes? Improve Productivity of the Business?
Yes, as it now performs the work previously done by the workers and it provides a straight and clean cut across large metal sheets automatically. Yes, as the number of metal sheets cut per day has increased without added manpower.

Example 3 – Key Management System

Existing method: The business has to hold and maintain a large number of keys for accessing server racks, safe boxes, security cabinets and lockers. This involves manual daily recording of key issuance and return in a record book.

New method: The key management system automates the process of key issuance, return and tracking by:

  • Releasing keys that a user is authorised to withdraw based on pre-defined access rights upon presentation of the access card
  • Indicating to the user where the keys should be placed during key return, ensuring that they are returned to the correct position
  • Logging all transactions in the system of which reports can be generated for audit trails
  • Eliminating the need for manual recording

Does the machine:

Automate/ Mechanise the Work Processes? Improve Productivity of the Business?
Yes, as it performs the work previously done by workers by automating the process of key issuance, return and tracking. Yes, as the time taken for key issuance, return and tracking is shortened without added manpower.

Example 4 – Conveying System

Existing method: Workers are required to physically carry the finished goods to the packaging area.

New method: Finished goods travel directly on the conveyor system and are transported out of the production premises for carton packaging. Workers no longer carry the goods to the packaging area.

Does the machine:

Automate/ Mechanise the Work Processes? Improve Productivity of the Business?
Yes, as it performs the work previously done by workers by automating/ mechanising the manual goods transportation process. Yes, as the time taken to transport the goods to the packaging area is shortened without added manpower.

Ascertaining Increase in Productivity of Newly Set-up Businesses

A newly set-up business does not have existing equipment with which to determine an increase in productivity arising from the new equipment. As such, to determine whether an equipment enhances the productivity of the new business, the equipment will be compared with the standard basic equipment used by other businesses in the same industry that are of comparable size to the newly set-up business.

For example, a newly set-up wholesale business that purchases an automatic tape cutting machine will be compared to existing wholesale businesses of comparable size in the wholesale industry. If the automatic tape cutting machine is more advanced than the standard machine used in comparable existing wholesale businesses, the machine will be considered to have met the criterion of improving productivity.

Subsequent Purchases of Similar Equipment

If you make subsequent purchases of similar equipment that have previously been approved by IRAS for PIC on a case-by-case basis, you must still submit another application to have the new equipment approved for PIC.

It does not matter whether this purchase is for replacement or as an additional acquisition. Each application is assessed based on whether the equipment meets the criteria at that point in time i.e. it automates/ mechanises work processes and enhances productivity of the business. Nonetheless, IRAS takes into consideration similar equipment previously approved for PIC.

How to Apply for Approval of IT and Automation Equipment

Step 1:

Before applying for approval, check if your equipment is listed in the prescribed list. If the equipment is in the prescribed list (PDF, 246KB), go ahead and make the PIC claim. If the equipment is not in the prescribed list, assess whether the equipment meets the criteria for case-by-case approval. Vendors of the equipment should not make the application on behalf of their customers.

Step 2:

When seeking case-by-case approval, download and complete the Application for Approval of Equipment for PIC Form (PDF, 916KB).

Step 3:

Submit the form to IRAS by post 2 months before the Income Tax Return filing due date or earlier in an envelope labelled clearly with:

  • 'PIC - Companies' for companies
  • 'PIC - Individuals' for sole-proprietorships and partnerships

Mail your form to:

55 Newton Road
Revenue House
Singapore 307987

Step 4:

IRAS processes the applications within 3 weeks of receiving the application forms. You will receive a notification from IRAS about the result of your application. Alternatively, businesses can log in to mytax.iras.gov.sg to view the case-by-case approval letter once the application has been approved.

Notes:
  • Businesses that wish to obtain case-by-case approval prior to incurring the IT and Automation equipment expenditure must submit their application early by the cut-off date (PDF, 87KB).
  • Do not apply for the PIC cash payout or claim PIC enhanced deductions/ allowances in your Income Tax Return until case-by-case approval of IT and Automation Equipment has been granted.
  • If the approval of IT and Automation Equipment has been granted, refer to:

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