A company’s financial year end in Singapore is the end of its accounting period, which is generally repeated every 12 months. A company’s financial year end does not have to fall on December 31st; it can occur on the last day of any month during the year.
During this period, businesses are required to compile financial reports, comply with corporate tax returns filing with the Inland Revenue Authority of Singapore (IRAS) and, file annual returns with the Accounting and Corporate Regulatory Authority (ACRA).
Considerations in Determining Financial Year End in Singapore
Those who intend to register a business in Singapore but have not yet chosen a financial year end in Singapore may need to examine three following factors:
1. Business Activities
Examine your business activities to determine if your organization encounters seasonal swings. For example, flower shops have an increase in revenue during Valentine’s Day as well as beach resorts during summer.
If your business is seasonal, you should schedule your financial year end in Singapore for the end of the business cycle, during the time when you have lower inventory and fewer transactions. This makes managing your accounting more convenient.
2. Tax Exemptions
Checking whether your firm qualifies for Singapore’s tax exemption scheme for new start-up companies is a primary consideration for newly incorporated companies when selecting their financial year end in Singapore.
In this scheme, corporations can enjoy tax exemptions for the first three successive Years of Assessments (YA):
- YA on or before 2019:
- Complete exemption on the first $100,000 of normal chargeable income; and
- An additional 50% exemption on the following $200,000 of normal chargeable income
- YA 2020 and onwards:
- Exemption of 75% on the first $100,000 of normal chargeable income; and
- Additional 50% exemption on the following $100,000 of normal chargeable income.
3. Parent Company
If you are creating a subsidiary company, it is suggested that your financial year end in Singapore should coincide with that of the parent company for more convenience.
In addition to minimizing accounting discrepancies, this is more practical because paperwork and tax filing for both the subsidiary and the parent company can be done concurrently.
Checking Your Company's Financial Year End in Singapore
Generally, section 198(1)(a) CA states that the company’s first fiscal year begins on the day of incorporation.
Based on whether your firm was incorporated prior to, on, or after August 31, 2018, various sets of guidelines will apply to determine its financial year end in Singapore:
- Companies incorporated on or after August 31st, 2018
- First financial year end in Singapore – The first fiscal year of the company begins on the day of incorporation and concludes on the date reported to ACRA at the time of incorporation. The first fiscal year cannot exceed 18 months following the date of incorporation.
- Subsequent financial year end in Singapore – The fiscal year end is presumed to be the anniversary of the fiscal year end date previously reported to the Registrar.
- Companies incorporated before August 31st, 2018
- First financial year end in Singapore – The date given to ACRA in the company’s most recent annual return or notification is the last day of the company’s first fiscal year. If there is no annual return or notification has been filed, the firm’s last day of the fiscal year will be the anniversary of its establishment.
- Subsequent financial year end in Singapore – The financial year end is defined as the anniversary of the financial year end date defined by the rules outlined above.
Changing Your Company's Financial Year End in Singapore
Notify ACRA through the Business Filing Portal if you want to change the financial year end in Singapore of your business after it has already been registered. There will be no fees associated with this transaction.
However, if the statutory deadlines for the financial statement filing, returns filing, and AGM have already passed, you will not be able to amend the financial year end in Singapore. This is something that you should keep in mind due to its significance.
In addition, you will be required to get approval from ACRA to amend the financial year end in Singapore if any of the following apply:
- Because of the adjustment to the financial year end in Singapore, the length of your company’s financial year will increase to more than 18 months; or
- You have already adjusted your company’s fiscal year end date during the past five years.
SJH Advisory: How We Can Help
When you incorporate a company, one of the numerous decisions that you are required to make is to establish a financial year for the company. It may appear simple, but it involves a lot of complex accounting and bookkeeping tasks.
SJH Advisory can help your company prepare for the financial year end in Singapore. We offer accounting and bookkeeping services to help you optimize time management, reduce costs, and get the best return on your investments.
We offer flexible accounting solutions to meet your business needs and deliver quality service with no hidden costs. Our team of highly skilled professionals will help to minimize your burdens, so you can focus on what matters most – your business goals.
Taking care of everyday tasks that would otherwise require your attention, your precious time can be freed up for essential business. You will be able to do more of what is important to you – while we take care of the rest. Get your FREE consultation today!
Financial Year End in Singapore - Frequently Asked Questions
During incorporation, companies are required to inform the Registrar of their financial year end in Singapore. It represents the final day of its accounting period. The accounting period is the recognized interval to complete an accounting cycle of the business
All companies need to prepare their financial statements within the due date after the financial year end in Singapore according to compliance filing requirements.
Companies who have an unusual fiscal year period, like 52 weeks instead of 12 months, should tell ACRA if they do not want to change their financial year end every year. Transactions for financial year end in Singapore notification/change for fiscal year concluding on or after August 31, 2018 will include this provision.
If the proposed change in the financial year end in Singapore for the company requires the Registrar’s permission, a rationale must be presented to the Registrar.