Financial Year End for Starters

21 May Financial Year End for Starters

How to determine FYE for the company

The Financial Year End (FYE) of a company refers to the end of the company’s accounting period, normally recurring every 12 months. A company’s FYE does not necessarily need to fall on 31 December and can actually fall on any day within the year.

The First FYE for newly set-up companies should not exceed more than 18 months from the date of incorporation. Under section 175 of the Companies Act, all company must held its first Annual General Meeting (AGM) within 18 months from the date of incorporation.

Default Financial Year End Based on Month of Incorporation

Year 2018

Month of Incorporation Default Financial Year End
January 2018 31st December 2018
February 2018 31st January 2019
March 2018 28th February 2019
April 2018 31st March 2019
May 2018 30th April 2019
June 2018 31st May 2019
July 2018 30th June 2019
August 2018 31st July 2019
September 2018 31st August 2019
October 2018 30th September 2019
November 2018 31st October 2019
December 2018 30th November  2019

 

Tax Exemption for New Start-ups

For Start-ups, it is recommended for companies to end their FYE by default. This is such that the company can fully utilize the tax exemption for the first three consecutive years and benefit from it. The below Table reflects the tax exemption benefit for the newly set-up companies for the first three years starting from the date of incorporation.

Chargeable Income
% Exempted from Tax
Amount Exempted from tax
First $100,000 75% $75000
Next $100,000 50% $50000

Should a company wishes to extend its first financial year end longer than 12 months but lesser than 18 months, it is important to note that that particular financial year will be considered as 2 Year of Assessments by IRAS for corporate tax submission. As a result, the company will be left with only 1 more year to be qualify for the above tax exemption benefit.

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