Productivity and Innovation Credit (PIC) legacy treatment — Eligibility and requirements checklist

The Productivity and Innovation Credit (PIC) scheme has ended — the last claim year was Year of Assessment 2018 and no new PIC benefits are available. Understanding the legacy treatment matters mainly for closing out old claims, handling clawbacks on disposed assets, and knowing which current incentive (the Enterprise Innovation Scheme) has taken its place.

Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.

What the Productivity and Innovation Credit (PIC) was and its current status

The Productivity and Innovation Credit was a broad tax incentive that gave enhanced tax deductions, and for a period a cash payout option, on qualifying activities such as acquisition of IT and automation equipment, staff training, and research and development. It was designed to encourage productivity investment among Singapore businesses, especially small and medium enterprises.

The scheme has lapsed. The final year of the enhanced deductions was Year of Assessment 2018, and the cash payout option ended earlier. There are no new PIC claims to make. What remains is legacy administration: honouring the minimum-holding conditions that attached to assets on which enhanced benefits were claimed, and dealing correctly with disposals.

Who this legacy guidance is for

This is relevant to businesses that claimed PIC enhanced deductions or cash payouts in earlier years and still hold — or have recently disposed of — the underlying qualifying equipment, and to advisers reconciling old capital-allowance schedules. It is also useful for anyone comparing what PIC offered against the current innovation incentives.

For the incentive that effectively succeeds PIC, see our companion guide on the Enterprise Innovation Scheme, which sets out today’s enhanced deductions for qualifying innovation activities: Enterprise Innovation Scheme (EIS) in Singapore (2026): Up to 400% Tax Deductions Explained.

Legacy conditions and clawback checklist

Where PIC benefits were claimed, the following legacy points still apply:

  • Minimum ownership period — qualifying equipment on which PIC was claimed generally had to be held for a minimum period; early disposal could trigger a clawback of the benefit.
  • Accurate records — retain invoices, claim computations and asset registers in line with statutory record-keeping requirements.
  • Correct disposal treatment — on sale or scrapping of a PIC asset, check whether a clawback adjustment is due in the relevant Year of Assessment.
  • No new claims — do not attempt to claim PIC on current-year spending; use current incentives instead.

Businesses managing these legacy items alongside a growing team should also keep work-pass compliance in view when hiring; our overview of Singapore employment passes is a useful cross-reference: Singapore vs Hong Kong 2026: Work Pass, Tax, Cost of Living and PR Compared.

Deductibility and the general rules that still apply

Even without PIC, ordinary revenue expenditure remains deductible under the general rule. Section 14(1) of the Income Tax Act 1947 allows a deduction for expenses wholly and exclusively incurred in the production of income, while Section 15 of the Income Tax Act 1947 lists expenses that are specifically not deductible. Capital equipment continues to attract capital allowances under the ordinary provisions.

So the practical effect of PIC ending is the loss of the enhanced (super-deduction) layer, not the loss of normal deductibility. Businesses should ensure their tax computations reflect ordinary rates of deduction and allowance rather than the lapsed enhanced rates.

What replaced PIC

The Enterprise Innovation Scheme (EIS) is the current headline innovation incentive, offering enhanced tax deductions on qualifying activities such as R&D, registration of intellectual property, acquisition and licensing of IP rights, qualifying training, and innovation projects. It is materially different from PIC in scope and mechanics, so do not assume old PIC categories map across.

If your business is planning productivity or innovation investment now, assess it against the EIS rules rather than the historical PIC framework.

Reconciling old PIC claims in your tax file

For finance teams, the practical task now is hygiene. Review the fixed-asset register for any equipment on which PIC enhanced deductions or cash payouts were claimed, confirm whether the minimum ownership period has been satisfied, and flag any items approaching disposal so that a potential clawback is not missed. Keep the original claim computations with the tax working papers.

If your records are incomplete, reconstruct the position from the relevant years’ tax computations and IRAS correspondence before disposing of any legacy asset. A clean reconciliation now avoids an awkward adjustment later.

From PIC to EIS: what actually changed

PIC offered a broad brush — enhanced deductions and, for a time, cash payouts across a wide set of activities, popular precisely because it was easy to access. The Enterprise Innovation Scheme is more targeted, concentrating enhanced deductions on genuine innovation activities such as qualifying research and development, intellectual-property registration and licensing, qualifying training and defined innovation projects.

The shift reflects a policy move from broad productivity support to focused innovation incentives. Do not assume a spend that qualified under PIC will qualify under EIS; assess each category against the current EIS rules and documentation requirements.

Common mistakes and gotchas

The most common error is a bookkeeper carrying forward a PIC-style enhanced deduction into a current computation — this is no longer valid and will not survive review by IRAS. A second is missing a clawback on the early disposal of a formerly PIC-claimed asset, which can surface years later.

Keep the accounting treatment clean: reflect only ordinary deductions and allowances now, and flag any legacy PIC assets in your fixed-asset register so disposals are handled correctly.

Official sources: acra.gov.sg.

Related guides

FAQs

Can I still claim PIC?
No. PIC has ended; the final enhanced-deduction year was Year of Assessment 2018 and the cash payout ended earlier. Current innovation spending should be assessed under the Enterprise Innovation Scheme instead.

What happens if I dispose of an old PIC asset?
Check whether the disposal breaches the minimum holding period that applied when the benefit was claimed. If it does, a clawback adjustment may be due in the relevant Year of Assessment.

Are my equipment purchases still deductible?
Yes — through ordinary capital allowances and, for revenue expenses, the general deduction rule in Section 14 of the Income Tax Act 1947. You simply no longer get the lapsed PIC enhancement.

What scheme replaced PIC?
The Enterprise Innovation Scheme (EIS), which offers enhanced deductions on qualifying R&D, IP, training and innovation activities under current rules.

Is the PIC cash payout still available?
No. The cash payout option ended before the scheme itself lapsed, and no further payouts can be claimed.

Should I amend old returns to claim missed PIC?
Time limits and the closure of the scheme make retrospective PIC claims impractical in most cases. Seek advice on your specific years before assuming any claim remains open.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.