Overview of PIC IT and Automation Equipment

PIC IT and automation equipment refers to:

  1. Any IT and automation equipment prescribed in the PIC IT and Automation Equipment List (233KB); or
  2. Any equipment approved for PIC on a case-by-case basis by the Minister or the Comptroller of Income Tax.

Not sure if your equipment qualifies for PIC benefits? Use this equipment search function. Simply open the file, key in your equipment in the box and hit 'Enter' to find out if your equipment qualifies for PIC.

  1. Second-hand IT and Automation Equipment
  2. Installation costs incurred as part of the costs of acquiring the equipment (e.g. site preparation, delivery and assembly costs)
  3. Equipment purchased for overseas use. If the PIC IT and Automation Equipment is placed with an overseas subcontractor in an outsourcing arrangement for the purpose of providing manufacturing services to the company, the cost incurred by the company to purchase the equipment will qualify for PIC if:
    1. The equipment is used exclusively for the manufacture of the company's products; and
    2. The company maintains control over the equipment used by the subcontractor (including maintenance of the equipment).
    For more information, please refer to Tax Treatment of Capital Allowance for Plant and Machinery Used by Persons Other than Your Company.
  4. Equipment leased for your business. If you lease PIC IT and Automation Equipment for use in your business, the lease payment incurred will qualify for PIC but only if the equipment is not onward leased to another party during the same basis period. Expenditure on both the purchase and lease of PIC IT and Automation Equipment will be capped under one activity. 

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 will take into consideration similar equipment previously approved for PIC.

Examples of Qualifying Expenditure (e.g. website development) and Non-Qualifying Expenditure

Qualifying Expenditure

Non-Qualifying Expenditure

  • Website development costs (including costs incurred for one-time registration of domain name for the website) from YA 2014
  • Cost or lease expenses of IT equipment such as fax machine, laser printer, computer, laptop and software (For lease payment of software, the lessee must be the end user with the right to use the software and not the right to reverse engineer, decompile, or disassemble the software, or exploit the copyright to the software.)
  • Cloud computing payments
    • Infrastructure as a Service (IaaS) - Qualifying costs include computing cost and storage cost
    • Platform as a Service (PaaS) - Qualifying costs include licensing fees, set-up fees, consultancy fees for SaaS enablement of service provider applications
    • Software as a Service (SaaS) - Qualifying costs include licensing fees, consultancy/ set-up fees
  • New! Accounting software including those listed in the IRAS' Accounting Software Register; the Register lists the accounting software that meets IRAS' technical requirements.

Please refer to FAQs at the bottom of this webpage for more information on these items.

Examples of IT and Automation Equipment Qualifying for PIC (By Industry)

Cost or lease expenses of the following equipment (non-exhaustive) that are not in the PIC IT and Automation Equipment List:

  • Air-conditioner
  • Freezer/ chiller/ refrigerator
  • Furniture and fittings
  • Motorcycle
  • Motor vehicle
  • Refrigerated display
  • Renovation and refurbishment cost (e.g. cost paid to install office workstation)
  • Uninterrupted power supply (UPS)

Examples of IT and Automation Equipment Qualifying for PIC (By Industry)

You may also wish to refer to the examples of IT and Automation Equipment that qualify for PIC benefits, listed by industry, below. This list contains illustrative examples of equipment approved for PIC on a case-by-case basis, and is not exhaustive.

IRAS evaluates each application based on certain qualifying criteria. The outcome of our evaluation may differ entity to entity,  depending on the existing level of automation or mechanisation in the business.  Applications for items on this list must still be submitted to IRAS for case-by-case approval, as we will need to evaluate if the qualifying criteria are met in each company's circumstance.

Equipment in the Prescribed PIC IT and Automation Equipment List  Equipment which may be approved for PIC on a Case-by-Case Basis
  1.  Air blower
  2. Battery-operated cart
  3. Boom lift
  4. Burnisher
  5. Carpet shampoo machine
  6. Vacuum cleaner
  7. Escalator cleaner
  8. Glass cleaning system
  9. Hi-pressure jet machine
  10. Pavement sweeper
  11. Ride-on scrubber
  12. Ride-on sweeper
  13. Road sweeper
  14. Steam cleaner
  15. Suction road sweeper
  16. Walk-behind auto scrubber

  1. Mat rolling machine
Equipment in the Prescribed PIC IT and Automation Equipment List  Equipment which may be approved for PIC on a Case-by-Case Basis
  1. Automated tunnel boring machine
  2. Boom lift
  3. Concrete pumps
  4. Mini crane
  5. Mobile crane
  6. Ride-on power float machine
  7. Self-climbing scaffold system
  8. Scissor lift
  9. Telescopic handler

For more examples, please refer to item 35 of the prescribed list.

  1. Automated ducting machine
  2. Bandsaw machine
  3. Core drill automatic feeding machine
  4. Crawler drilling machine
  5. Demolition robot
  6. Floor grinding machine
  7. Glass tempering system
  8. Hydraulic demolition machine and breaker
  9. Hydraulic drilling rig
  10. Noise monitoring system
  11. Pipe jacking machine
  12. Profiling machine
  13. Slurry shield machine
  14. Soil testing system
  15. Wire saw machine

 Equipment in the Prescribed PIC IT and Automation Equipment List Equipment which may be approved for PIC on a Case-by-Case Basis
  1. Automatic double layer stirrer and cooking machine
  2. Automatic grilling machine
  3. Automatic ice slicer
  4. Combi oven
  5. Dishwasher
  6. Dumb waiter lift
  7. Rolled pasta sheet machine
  8. Vacuum packing machine
  9. Vegetable preparation speciality machine

N.A. 
Equipment in the Prescribed PIC IT and Automation Equipment List  Equipment which may be approved for PIC on a Case-by-Case Basis
  1. Automatic capping machine
  2. Automatic filling machine
  3. Automatic thermoforming vacuum machine
  4. Cake filler and conveyor steamer
  5. Horizontal mixer
  6. Rice-roll processing machine
  7. Spiral freezer
  8. Tunnel oven
  9. Vacuum packing machine
 
  1. Conveying system and metal detector 
  2. Semi-auto egg tart forming machine
Equipment in the Prescribed PIC IT and Automation Equipment List  Equipment which may be approved for PIC on a Case-by-Case Basis
  1. Bar-coding system
  2. Computer-to-plate and computer-to-press systems
  3. Offset printing press
  4. Radio-Frequency Identification (RFID) system
  1. Cable analyser
  2. Key management system
Equipment in the Prescribed PIC IT and Automation Equipment List  Equipment which may be approved for PIC on a Case-by-Case Basis
  1. Electric hedge trimmer
  2. Ride-on mower
  3. Ride-on aerator
  4. Soil mixer
  5. Trencher
  6. Wood chipper
  7. Mechanised leaf shredder
  8. Potting machine 
  1. Compost turning machine 
Equipment in the Prescribed PIC IT and Automation Equipment List Equipment which may be approved for PIC on a Case-by-Case Basis 
  1. Blister packaging machine
  2. Boom lift
  3. Computer-to-plate and computer-to-press systems
  4. Extrusion machines
  5. Injection mould machine used for making plastic, ceramic, metal or silicone rubber components
  6. Offset printing press
  1. Automatic vertical cutting machine
  2. Bending machine
  3. Edge bending machine
  4. Hydraulic guillotine shear
  5. Hydraulic hot press machinery
  6. Hydraulic insertion machine
  7. Metal sanding machine
  8. Rotary shearing machine
  9. Rubber trimming machine
  10. Panel saw machine
  11. Taping machine head (with PLC control system and programming)
Equipment in the Prescribed PIC IT and Automation Equipment List  Equipment which may be approved for PIC on a Case-by-Case Basis
  1. Bar-coding system
  2. Computers
  3. Customer relationship management system
  4. Fingerprint recognition device connected to IT system
  5. Interactive shopping carts or kiosks
  6. Point of sale system
  7. Printers 
  1. Automatic kerato-refractometer
  2. Brush chipper
  3. Hygiene monitoring system
Equipment in the Prescribed PIC IT and Automation Equipment List  Equipment which may be approved for PIC on a Case-by-Case Basis
  1. Industrial shredder
  2. Mobile or static refuse compactor
  3. Jaw crusher or impact crusher
  4. Load handling system
  5. Composting equipment 
  6. Hydraulic shear

For more examples, please refer to item 40 of the prescribed list.

N.A. 
Equipment in the Prescribed PIC IT and Automation Equipment List Equipment which may be approved for PIC on a Case-by-Case Basis 

N.A.

  1. Complexion analysis system
  2. Electric traction therapy equipment
  3. Smart pressure therapy system
 Equipment in the Prescribed PIC IT and Automation Equipment ListEquipment which may be approved for PIC on a Case-by-Case Basis 
  1. Bar-coding system
  2. Milling machine
  3. Punching and laser cutting machine
  4. Scissor lift
  5. Shrink wrap packing machine 
  1. Automatic edge banding machine
  2. Automatic liquid/raw material dispensing machine
  3. Automatic paper cutter
  4. Automatic tape cutting machine
  5. Balancing machine
  6. Bottle staking machine
  7. Colour spectrophotometer
  8. Dry powder refilling machine
  9. Electric stacker
  10. Envelope making machine
  11. Helium leak test system
  12. Intelligent battery refurnish system
  13. Laser crystal engraving machine
  14. Multi-head automated embroidery machine
  15. Pin marking machine
  16. Roll forming machine
  17. Slitting machine 
  18. Sulphur palletized plant and granulator
  19. Thermal cleaning system
  20. Vacuum and gas flushing sealer
  21. Walform machine

Claiming Enhanced Capital Allowances (CA)

Enhanced CA are generally granted on the full cost of the equipment. Any claim for enhanced CA (300%) must be made together with the base CA (100%) for automation equipment purchased in basis period relating to the Year of Assessment of concern.

If the total costs incurred exceed the expenditure cap, you can claim enhanced CA only on the partial cost of one piece of equipment .

The table below shows the period over which the base (100%) and enhanced (300%) CA can be written down:

Cost per item

Type of Equipment

Items 1 to 29 of List (i.e. also prescribed automation equipment)

Items 30 to 40 of List (i.e. not prescribed automation equipment)

Approved for PIC on case-by-case basis (i.e. not in List)

Cost $5,000* or less per item

Write down over:

  • One year;
  • Three years; or
  • Tax working life

Write down over:

  • One year
  • Three years; or
  • Tax working life

Write down over:

  • One year
  • Three years; or
  • Tax working life

Cost more than $5,000 per item

Write-down over:

  • Three years; or
  • Tax working life

Write-down over:

  • Three years; or
  • Tax working life

* Note: Low-value assets can be written off in one year subject to a maximum cap of $30,000 per YA. For PIC-qualifying equipment costing $5,000 or less, both the base plus enhanced allowance will be used to determine whether the cap of $30,000 has been reached. For details on how to claim CA on low-value assets, please refer to One Year Write-off for Low-Value Assets.

For details on how to claim CA, please refer to Capital Allowance.

For more information, you may refer to Section 3 of the e-Tax Guide on Productivity and Innovation Credit (Fifth Edition) (1.02MB) Revised!.

Expenditure on equipment under a sale and lease-back arrangement will not qualify for enhanced CA if CA had previously been allowed for that equipment prior to the sale and lease-back arrangement.

Cash Payout on PIC IT and Automation Equipment

From YA 2016, you may qualify for cash payout on PIC IT and Automation Equipment if the equipment is used by your business at the point of electing for cash payout. This condition reinforces the objective of encouraging businesses to increase their productivity by using automation equipment in their businesses.

For businesses with genuine cash flow difficulties and who are not able to secure the delivery of the equipment before payment is made, IRAS may waive the requirement for the equipment to be "in use" on a case-by-case basis.

Claiming Cash Payout

If you opt to convert the qualifying expenditure into a cash payout, the conversion must be done on a "per equipment basis" on the full cost of the automation equipment, subject to the relevant expenditure cap. Partial conversion is not allowed.

If the qualifying expenditure of the equipment is greater than the amount qualifying for a cash payout conversion, the excess expenditure incurred will be forfeited and will not be available for capital allowance claims against the business income.

 

Cash Payout for PIC IT and Automation Equipment under Hire-Purchase (HP) Agreement

Businesses can opt for cash payout on PIC IT and automation equipment purchased under HP agreements signed during the basis period for YA 2012 to YA 2018, where the repayment schedule straddles two or more financial years. The cash payout option is not available for assets purchased under HP agreements (with repayment schedule straddling two or more basis periods) signed during the basis period for YA 2011.

For PIC IT and automation equipment acquired on hire purchase, the cash payout conversion rate to be applied is based on the date on which the HP agreement is signed. For example, the cash payout conversion rate for an equipment acquired via a HP agreement signed on 1 Jul 2016 is 60%. If the HP agreement is signed on or after 1 Aug 2016, the cash payout conversion rate will be 40%. Business can continue to claim for principal repayments that straddle beyond YA 2018 if the HP agreement is signed in the basis period for YA 2012 to YA 2018. If the HP agreement is signed in the basis period for YA 2019 or after, the expenditure incurred will not qualify for cash payout. For more details on the cash payout option, please refer to How the Productivity and Innovation Credit (PIC) Scheme Benefits You.

The amount of cash payout for each YA will be computed based on the principal amount paid during the basis period for that YA, even if the repayment schedule extends beyond the period for the last qualifying YA (i.e. YA 2018).

Company A is a Dec year-end company. During the quarter Jul to Sep 2016, Company A invests in several items of qualifying equipment for its factory and elects for cash payout on all the equipment.

The applicable cash payout rate and the amount of PIC cash payout for each equipment is as follows:

Equipment Purchase Date HP Agreement Signed Date Cost ($)Cash Payout Rate Cash Payout ($)
 W (cash acquisition)1 Jul 2016- 20,000 60% 12,000
 X (under HP)-1 Jul 2016 30,000 60% 18,000 *
 Y (cash acquisition)1 Aug 2016- 10,000 40% 4,000
 Z (under HP)-1 Aug 2016 20,000 40% 8,000 *
 Total   80,000  42,000

* The amount of cash payout disbursed will depend on the actual principal sum repaid during each quarter or combined consecutive quarters. The cash payout on principal sums committed will be paid, even beyond YA 2018.

New! Please refer to the table below for further illustration on the amount of PIC cash payout that Company A will receive in respect of its equipment acquired under HP terms.

Equipment under HPHP Agreement Signed Date

Cost

($)

Cash Payout Rate

PIC Cash Payout

(assume principal repayments over 3 years on a straight-line basis)

         

YA 2017

($)

YA 2018

($)

YA 2019

($)

Principal RepaymentPIC Cash PayoutPrincipal Repayment PIC Cash PayoutPrincipal RepaymentPIC Cash Payout
 X1 Jul 2016 30,000 60%  10,00010,000 x 60% = 6,000 10,000 10,000 x 60% = 6,000 10,000 10,000 x 60% = 6,000  
 Z 1 Aug 201620,000  40% 6,6676,667 x 40% = 2,666.80  6,6676,667 x 40% = 2,666.80   6,6666,666 x 40% = 2,666.40 

For businesses claiming cash payout on PIC IT & Automation Equipment acquired under a HP agreement entered into during the basis period for YA 2013 to YA 2018, please submit the completed Hire-Purchase Template (296KB) together with your PIC Cash Payout Application Form.

Treatment of Bundled Items

When IT and automation equipment is purchased, additional items may be bundled with it. Such bundled items could include a cash discount/rebate, cash vouchers, maintenance services or warranty fees. An example is a business that purchases an offset printing press and also receives free prints or the trade-in of the old machine as bundled items.

PIC benefits are only available on the purchase cost or lease payments applicable to PIC IT and Automation Equipment. Bundled or additional items must be deducted from your PIC claim as only the net amount incurred qualifies for PIC benefits.

Examples of Bundled Deals

What You Can Claim for PIC

Cash discount/rebate or cash-back

What you spent to purchase or lease the PIC IT and Automation Equipment minus the cash discount/rebate or cash-back

Additional items (e.g. cash vouchers, maintenance services, free prints that come with photocopier) bundled with the purchase price or lease payments

What you spent to purchase or lease the PIC IT and Automation Equipment minus the value of the additional items. Additional items are not qualifying costs

Warranty fees

What you spent to purchase or lease the PIC IT and Automation Equipment minus warranty fees or payment for an extended warranty period

Old assets traded in for a market value higher than what it is worth

What you spent to purchase or lease the PIC IT and Automation Equipment minus the amount given for the trade-in asset in excess of its market value


Fees (penalty) incurred by customer for early termination of previous lease, where the new purchase/ lease price includes the early termination fee

What you spent to purchase or lease the PIC IT and Automation Equipment minus any fees (penalty) incurred on the early termination of the lease 

Lease agreement with rollover lease payments from a previous lease arrangement

The expenditure claimable under PIC must exclude the amount of outstanding lease payments under the previous lease agreement

As a concession, IRAS will only accept the bundled items as part of qualifying expenditure when the bundled items are incidental costs.

Bundled items are regarded as incidental when the value of the bundled non-qualifying items is:

  1. Less than or equal to 10% of total value of sales/lease package; and
  2. Less than or equal to $3,000

For more details on bundled items, please refer to How PIC Should Be Claimed.  

Disclosing Errors in PIC Claims to IRAS

You must not enter into arrangements that seek to artificially inflate PIC claims. Businesses found to have over claimed PIC benefits through such abusive arrangements may be faced with a penalty for the cash payout overpaid or would have been overpaid, or tax undercharged.

If you have engaged in abusive arrangements to take advantage of the PIC scheme or have assisted others in doing so, you should disclose such arrangements to IRAS immediately. You can do so by completing the PIC Disclosure of Error Form (122KB) and submitting it to IRAS.

Sales/lease packages for photocopiers typically include bundled items such as free prints, cash vouchers, among others, as well as rollovers and trade-ins. These items should be excluded from the amount that PIC is claimed on.

 If you discover errors in your claims, please refer to the Voluntary Disclosure Programme and PIC Disclosure of Error Form (122KB) on how you can disclose errors in PIC claims to IRAS.

FAQs

  • Group 1 – Others (Website, Software, Cloud Computing)

    • Can website development costs and web hosting fees qualify for PIC?

      Website Development Costs from YA 2014 to YA 2018

      PIC benefits may be claimed on development costs incurred on the provision of a new website, including costs incurred for the one-time registration of a domain name for the website. You cannot claim PIC benefits (both cash payout and enhanced allowance) if the website is under development. The claim can only be made when the website is functional i.e. accessible over internet.

       

      Subsequent changes or enhancements (e.g. routine updating, re-writing of contents, maintenance and support) will be considered as a revamp of an existing website and does not qualify for PIC as it does not involve a provision of a new website. However, if there are costs incurred on the addition of e-commerce functions to the website or any enhancement to make the website mobile responsive, these costs will be eligible for PIC as these enhancements are regarded as software development (category 4 of the PIC IT and Automation Equipment Prescribed List). 

       

      Website Development Costs from YA 2011 to YA 2013

      Website development costs do not qualify for PIC benefits. However, if you are able to give a breakdown of the website development costs, PIC benefits may be granted on costs incurred for software application and hardware such as server, which are included in the PIC list. 

       

      Web Hosting Fees 

      Fees paid for web hosting services do not qualify for PIC benefits. However, if you are able to provide a breakdown of the web hosting fees, PIC benefits may be granted on costs incurred for the acquisition/ leasing of PIC IT and Automation Equipment such as software and server. 

    • What are some examples of qualifying and non-qualifying website development costs?

      Examples of qualifying website development costs include:

      •    One-time registration of domain name; 

      •    Cost of developing or purchasing the website, including design fees; 

      •    Software application development costs; and

       •    Hardware and server costs.

       

       Examples of non-qualifying costs include:

       •    Renewal or purchase of domain name;

       •    Web hosting services;

       •    Online advertising/ marketing services (e.g. providing Search Engine Optimisation (SEO) services, Search Engine Marketing (SEM) services, etc);

       •    Routine updates; and

       •    Maintenance and support services. 

       

    • Will expenditure incurred on upgrading of software fall under PIC IT & Automation Equipment?
      Yes, expenditure incurred on software upgrades qualifies for PIC.
    • Will expenditure incurred on leasing of office system software qualify for PIC?
      Yes, expenditure incurred on leasing of office system software qualifies for PIC.
    • Does purchase of software (e.g. shrink-wrap software) qualify for PIC?
      Yes, the cost of purchase qualifies for PIC.
    • Do fees paid for maintenance of software qualify for PIC?
      No. Payments for maintenance of software (e.g. debugging, helpdesk support) will not qualify for PIC. You can continue to claim deduction of such maintenance fees under the current tax rules.
    • Can my business claim PIC benefits on the development of software in Singapore?

      If the software is developed for business use, PIC benefits can be claimed on the development costs.

       

      Qualifying development costs include fees paid to external software developers.

       

    • Must my software development be completed before I can make PIC claims?

      For PIC cash payout claims:

      You cannot claim PIC cash payout if the software is under development. The claim can only be made when the software is fully developed. However, if the development is by modules and the completed module can function independently, you can claim PIC cash payout after each module is completed.

       

      From YA 2016, to qualify for cash payout on PIC IT and Automation equipment, businesses will need to show that the equipment is in use by the business at the point when they elect for cash payout. This condition reinforces the objective of encouraging businesses to increase their productivity by using automation equipment in their businesses. For businesses with genuine cashflow difficulties and that are not able to secure the delivery of the equipment before payment is made, IRAS may waive the requirement for the equipment to be “in use” on a case-by-case basis.

       

      For enhanced allowance claims: 

      To claim enhanced allowance over one year under Section 19A(2), the software must be fully developed and installed before the enhanced allowance can be claimed. However, if the development is by modules and the completed module can function independently, you can claim enhanced allowance after the module is completed.
       
      To claim enhanced allowance over three years under Section 19A(1), the software does not need to be fully developed and installed before the enhanced allowance can be claimed. The cost incurred in the related YA will qualify for enhanced allowance to be claimed over three years. 

    • I am a cloud computing vendor. Will my expenditure incurred on PIC IT and Automation Equipment used in the provision of cloud computing services to my customers qualify for PIC?

      Expenditure incurred to acquire/ lease hardware

      The expenditure you incurred to acquire/ lease PIC IT & Automation Equipment (hardware) will qualify for PIC. 

      Expenditure incurred to acquire/ lease software

      Your expenditure to acquire/lease software that is onward leased to your customers will not qualify for PIC. Only the cloud computing customers, who are the end users of the software can claim the PIC benefits on such expenditure. However, if you acquire/lease software for your own business use, you can claim PIC benefits on the software. 

       

  • Group 2 - Equipment Acquired on Hire Purchase or Leasing

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