Q：
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What is Financial Year End (“FYE”)?
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A：
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The FYE refers to the end of the company’s accounting period. The common choices by companies include 31 March, 30 June, 30 September or 31 December. The FYE of a company is important because after the date has passed, a financial statements for the determined financial year must be prepared for Annual Return filing purposes with Accounting and Corporate Regulatory Authority of Singapore (“ACRA”) and filing corporate tax returns with the Inland Revenue Authority of Singapore (“IRAS”).
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Q：
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How to determine a Company’s FYE?
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A：
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It depends on whether the company was incorporated before, on or after, 31 August 2018 and there are different sets of rules on determining a FYE will apply to the company:
1.
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Companies incorporated on or after 31 August 2018
(1)
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The first FYE of the company starts on the date of incorporation, and ends on the date notified ACRA during the incorporation.
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(2)
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The subsequent FYE is deemed to be the anniversary of the FYE date previously notified to the ACRA.
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2.
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Companies incorporated before 31 August 2018
(1)
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The company’s FYE is the date provided to ACRA in the Annual Return or notification that the company had last filed with ACRA. If the company has not filed an Annual Return or notification, the anniversary of the date of incorporation is deemed by law to be their FYE.
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(2)
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The subsequent FYE is deemed to be the anniversary of the FYE date as determined using the rules in (a) above.
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Q：
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What is the consideration when determining the Company’s FYE?
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A：
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There are few factors to consider when determining the date of the company’s FYE:
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Eligibility for Tax Exemptions
One common concern for new companies when determining their FYE is whether they qualify for the Tax Exemption Scheme for New Star-Up Companies. In order to enjoy the maximum tax incentives, the newly incorporated companies may fix their FYE on the last day of the 11th month or any date as close as 12 months from the date of incorporation.
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2.
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Whether your company is a subsidiary company
If the Singapore company is set up as a subsidiary, it would be best to align the FYE to that of the holding company, so that the documentation for both companies, such as financial statements and tax filing can be processed at the same time.
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Q：
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How to change the Company’s FYE?
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A：
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In order to change the FYE after incorporation, the company must notify ACRA of a change in FYE through Bizfile portal.
According to the ACRA’s requirements, the company can only change the FYE for the current or immediate previous financial year. The company is also not allowed to change the FYE if the deadlines for holding of the Annual General Meeting (“AGM”) and filing of Annual Return or sending of financial statements have passed.
In addition, the Company cannot change its FYE without ACRA’s approval:
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if the change in FYE will result in a financial year longer than 18 months; or
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2.
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if the FYE was changed within the last 5 years (from the last changed FYE)
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Q：
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Can the Company has a financial year period which is not 12 months?
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A：
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Yes, the companies can have unusual financial year period such as 52 weeks rather than 12 months. They should notify ACRA of this if they want to avoid applying for approval to change FYE every year.
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