Choosing a Financial Year End date for your company is one of the most important things that you need to do after your company has been successfully incorporated. This date will serve as the date in which your corporate fillings and taxes are due.
What is the meaning of Financial Year End in Singapore?
Whether you own or manage a business in Singapore, your Financial Year End date serves as a date in which you are due to submit all of your company’s Annual Returns and tax documentation for the year. In accounting terms, this period is known as Financial Year. It is by law that you submit all of your company’s Annual Returns and tax documentation by the last day of your company’s Financial Year.
Since the Financial Year does not have to be the same as the calendar year, it can be on any day within the year. However, keep in mind that your Financial Year is still 12 months long.
So, how do you know the right starting and ending date of your company’s Financial Year?
Determining a Financial Year End For a New Company in Singapore
You are the one in charge setting both the starting and ending date of your company’s Financial Year. Just to give you a few examples – the most common choices are March 31, June 30, September 30, and December 31. For others, the Financial Year usually begins on the date of a company’s incorporation.
Unless the Registrar gives you permission to extend it, your first Financial Year cannot be more than 18 months long. All other subsequent Financial Year that comes after will be 12 months long, starting on the day following the end of your previous Financial Year.
Note that you have to determine your company’s Financial Year End during the incorporation process. You must also make it clear whether your accounting period covers 12 months or more than 52 weeks.
How Long should your Company’s First Financial Year be?
Although it is true that your company’s first Financial Year can be as long as 18 months, tax administrator IRAS only operates with 12-month periods.
Any period that lasts longer than 12 months will be split into two independent periods, even if it is a single Financial Year from your point of view. It may have a direct effect on the taxes that you have to pay, especially if you are intending to enjoy the tax exemption schemes. With such benefits, you should take some time to think through the exemptions you are eligible and would like to file for while setting the date for your first Financial Year End.
Is it possible to Change your Company’s Financial Year End Date?
Yes, it is possible to change your company’s Financial Year End. However, you can only change your current or your previous Financial Year. You cannot do so if your statutory deadlines for the filing of Annual Returns, the holding of Annual General Meeting, or the submission of financial statements have passed.
You can change your company’s Financial Year End by sending a notice to the Registrar. The following situations will require the registrar’s approval:
- If your proposed change will make your Financial Year longer than 18 months
- If it is your third request for the change
- If there was already a change in Financial Year End within the last 5 years
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