What Is The Financial Year End?
Every company in Singapore must have a Financial Year End (FYE). If not specified, it is determined to be from the date of your company’s incorporation until the day before its anniversary. On the anniversary, a new FYE is determined.
This means that if you incorporated your company on 21st August 2020, the end of your first FYE is on 20th August 2021. Then, your second FYE will start on 21st August 2021, and so on.
Why Is This Date Important?
It is a date which determines your period of taxation and a few other matters, like holding an Annual General Meeting, or submitting your Financial Reports to the government tax body.
On the non-regulatory side, the end of the FYE is also a time when companies get busy with stock taking and doing internal audits. If the end of the FYE coincides with a busy period, such companies might find it difficult to handle so many things at once.
How To Decide Your Ideal FYE?
You may decide to set your FYE during your lull periods, or at the end of your business cycle, if you have more of a seasonal type of business.
Alternatively, if you want an easy-to-remember FYE, you can set it to January to December, which is the period of the Singapore tax financial year.
You could also set it from April to March, in line with the Singapore financial year.
If you are a subsidiary company, you might want to set your FYE to match the holding company’s FYE, to make auditing easier.
Finally, you can start your FYE anytime you want to. It can be an anniversary, or birthday, or an event. Your only limit is you only have up to 366 possible starting days of the year.
As a start-up, you also have another consideration, which is your entitlement to the Start-Up Tax Exemption scheme. For more information on how this saves you on taxes, and also how you can accidentally sabotage this handout for yourself,
What If I Want To Change My FYE?
If you feel you might want to change your FYE, you will need to notify Accounting and Corporate Regulatory Authority (ACRA). For more assistance, you can contact us at email@example.com
Do note that you may not extend your current or previous financial year if the deadlines have passed for holding the Annual General Meeting, filing of Annual Returns, or sending of your financial statements.