Year of Assessment (YA)

The year of assessment (YA) is defined by IRAS as the year in which income tax is estimated, filed with tax authorities, and tax bills are cleared. This assessment is for the prior year’s chargeable income.

Who decides the Year of Assessment (YA)?

The company can choose the financial year-end (FYE) to calculate its YA based on its preference. However, most organisations choose December 31 as their closure date.

If the fiscal year of a corporation lasts more than 12 months, it must be indicated on the income tax return and taxed as two years.

The corporation, for example, was founded on August 1, 2020, with a fiscal year-end date of December 31, 2021.

When completing your Singapore tax return for the fiscal year 1 August 2020 to 31 December 2021, you must declare your company’s income based on the following two years of taxation:

The fiscal year from 1 August 2020 to 31 December 2020 is covered by the 2021 tax year.
The fiscal year from 1 January 2020 to 31 December 2021 is covered by the 2022 tax year.

You also have the option to change the FYE later by updating the same on BizFile+. IRAS will automatically be updated based on your records on ACRA.

Consequences of Misinterpretation of the Term “Year of Assessment”

Confusion during the assessment year may result in late filing of tax returns, resulting in inefficient accounting department performance and IRAS penalties.