Singapore Includes Cloud Computing In Tax Incentives

by Mary Swire, Tax-News.com, Hong Kong

26 October 2011

At a recent forum, Singapore’s Infocomm Development Authority confirmed that businesses will, through the inclusion of related costs under the Productivity and Innovation Credit (PIC) scheme, be able to obtain significant tax benefits for cloud computing.

Introduced last year and improved in the 2011/12 Budget, the PIC provides businesses with tax benefits for investing in a broad range of productivity improvement and innovation activities.

The amount of tax deduction or allowance was increased to 400% for the first SGD400,000 (USD317,000) of research and development (R&D) expenditure, and businesses are also allowed to combine that annual expenditure cap for 2013 to 2015 into a new ceiling of SGD1.2m over the three years.

There is also an enhanced cash conversion option where taxpayers can opt to receive, in lieu of tax deduction benefits, a cash payout of 30% of the first SGD100,000 of qualifying expenditure (a maximum of SGD30,000).

Singaporean businesses, including small- and medium-sized enterprises, can now, therefore, claim for their cloud computing expenditure, within certain categories such as the acquisition or leasing of technological equipment, training expenditure, the acquisition and registration of intellectual property rights, actual costs of research and development, and costs incurred in the creation of new products and industrial designs.

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