Change Of Financial Year End In Singapore
The Financial Year End (FYE) of a company refers to the end of the company's accounting period, which typically recurs after every 12 months.
Every company in Singapore has to determine its own FYE because it can fall on any day within the year and not necessarily on 31 December.
What's The Process Of Changing Your Company's Financial Year End?
If your company already started operations and you wish to change your FYE, you must start by notifying ACRA of your decision to make this change. This must be done through the BizFile+ website under the "Change of Financial Year End" transaction. You will not be charged for the transaction.
Generally, you are only allowed to change the FYE for the current or immediate previous financial year. ACRA does not allow companies who have already passed the statutory deadlines for the holding of the Annual General Meeting (AGM), filing of Annual Returns or sending of financial statements.
In addition, ACRA must approve the change of FYE if it will make your company's financial year to be longer than 18 months or it has been less than 5 years since you last changed your company's FYE.
Why Would Your Company Change Its Financial Year End?
Tax Remittance
When it comes to remitting taxes, a Singapore business may change its fiscal year for operational convenience, liquidity reasons, and industry benchmarking, especially because it makes most of its money in a certain month. This is a good move because the business will be having abundant cash to readily settle its fiscal debts during that period.
Financial Reporting
You can change the FYE of your Singapore Company for financial reporting purposes, especially in order to display healthy-looking results that generally come from the most active period of the year. Therefore, you can change your FYE so that you can show investors that your business is doing well overall.
Strategic Reasons
A publicly traded Singapore company may change its FYE for stock-trading reasons, hoping to set the tone for industry performance and prevent adverse security-exchange fluctuations in its share value. If the business is the first to announce operating results, investors might give it a "benefit of doubt" reprieve and not bid the worth of its shares down, even if it posts adverse results later.
Synchronise The Financial Year With Holding Company
There may be requirements for the financial year of a subsidiary company to coincide with its holding company and for consolidation and group reporting purposes.
How Can You Determine The FYE Of Your Singapore Company?
Generally, according to section 198(1)(a) CA, the company's first financial year starts on the company's date of incorporation. Different sets of rules on determining a company's FYE will apply depending on whether your company was incorporated before, on or after, 31 August 2018:
| Incorporation | Period | Rules |
|---|---|---|
| Companies incorporated on or after 31 August 2018 | First FYE |
|
| Subsequent FYE |
|
| Incorporation | Period | Rules |
|---|---|---|
| Companies incorporated before 31 August 2018 | First FYE |
|
| Subsequent FYE |
|
Your company's FYE defines the end of your accounting period, after which financial report will be prepared for purposes such as filing annual returns with ACRA and filing corporate tax returns with IRAS. By default, ACRA assigns a company's financial year end to be exactly a year from its date of incorporation.
Can Tianlong Assist You With Changing Your Company's Financial Year End?
We can help you change your company's financial year end with ease. The least we need is your Company's registration number, Company's name, Revised Financial Year End Date, and Financial Year Period.
Contact us TODAY!
