Applying for Approval of IT and Automation Equipment

As the PIC scheme has expired after the Year of Assessment (YA) 2018, businesses will not be allowed to claim PIC benefits on expenditure incurred after the basis period of YA 2018.

IT and Automation Equipment that qualify for PIC benefits are those prescribed in the PIC IT and Automation Equipment List (PDF, 227KB). Businesses that invest in equipment not in the prescribed list but that 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.

Submitting Equipment 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, 227KB). 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 two 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 will grant 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)


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

    b. 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