How To Choose and Change Financial Year End For New Singapore Business Owners

Choosing and changing the financial year end in Singapore is a critical decision that can significantly affect your financial management and compliance obligations. It marks the completion of your accounting period and serves as a basis for financial reporting, tax assessments, and regulatory requirements.

In this article, we will provide a comprehensive guide on choosing and changing the financial year end in Singapore. We will explore important factors, such as start-up tax exemptions, business cycles, and subsidiary relationships. 

Overview of Financial Year End In Singapore

The financial year end in Singapore marks the culmination of its accounting period. This accounting period is a designated timeframe within which the company completes its accounting cycle and assesses its financial performance. 

The duration of an accounting period can vary, typically spanning either 12 months or 52 weeks. For instance, if you opt for a 12-month accounting period commencing 1 January 2023, your company’s financial year end will be 31 December 2023.

Factors on How to Choose A Financial Year End In Singapore

Considering these factors when choosing your financial year end in Singapore will help you optimize tax exemptions and align accounting practices, ensure compliance with regulatory requirements, and facilitate efficient financial management for your Singapore-based business.

Tax Exemption for Start-ups and Newly Incorporated Companies

When choosing a financial year end in Singapore, it is crucial to take into account the tax incentives offered through the tax exemption scheme for newly established start-up companies. This scheme offers the following benefits for the first 3 consecutive YAs of a company, and it was introduced from YA 2020 onwards.

  • A 75% exemption on the initial S$100,000 of normal chargeable income.
  • Further 50% exemption on the subsequent S$100,000 of normal chargeable income.

To maximize its coverage for your start-up, choose a financial year end in Singapore that falls on the last day of the 11th month from the date of incorporation.

The types of business: Subsidiary

If your company operates as a subsidiary of another company, it is important to synchronize the financial year end of your subsidiary with that of the holding company. This alignment facilitates the filing of consolidated financial statements, avoiding complications and discrepancies in accounting practices between the two entities.

Business cycle 

The nature of your business and its corresponding business cycle is another crucial factor to consider when determining the financial year end in Singapore. Business cycles typically involve fluctuating production, trade, and economic activity, often influenced by seasonal factors.

To ensure efficient bookkeeping and financial management, selecting a financial year end in Singapore that aligns with the end of your business cycle is recommended. Opting for a financial year end in Singapore when there are fewer transactions and inventory is at its lowest can give you more time to manage your accounts effectively.

Other factors 

In addition to the factors mentioned above, there are several compliance requirements associated with the financial year end in Singapore that need to be taken into account:

  1. Estimated Chargeable Income (ECI) – Companies are generally required to file ECI within three months after the financial year end. However, certain companies may be eligible for ECI waiver or qualify for administrative concessions.
  2. Annual General Meeting (AGM) – Listed companies must conduct the Annual General Meeting within four months following the conclusion of their financial year, while other companies have a timeframe of six months. Compliance with AGM requirements ensures transparency and accountability in corporate governance.
  3. Annual Return (AR) – Following the AGM, companies must file Annual Returns. The filing deadlines depend on the company’s listing status and whether it keeps a branch register outside Singapore.

How To Change Your Financial Year End In Singapore

Changing the financial year end in Singapore involves specific steps and requirements to comply with regulations. Here’s a guide on how to change your financial year end

  1. Notify the Registrar – Companies must inform the Registrar of Companies in Singapore about any proposed changes to the financial year end in Singapore. This notification ensures adherence to statutory obligations and allows for appropriate reporting and filing timelines adjustments.
  2. Change for Current or Immediate Previous Financial Year – Companies can change their financial year end for the current or immediate previous financial year. This allows businesses to align their accounting periods more effectively or adapt to evolving business requirements.
  3. Consider Statutory Deadlines – It’s crucial to consider the statutory deadlines for key activities such as holding the AGM, filing the AR, and sending financial statements. Changing the financial year end may be impossible if these deadlines have already passed. Complying with these deadlines ensures regulatory transparency and accountability.
  4. Registrar’s Approval – In some circumstances, getting the Registrar’s consent is required in order to amend the financial year end. If the proposed change will result in a financial year that is longer than 18 months, approval is normally needed. 

To initiate changing the financial year end, companies should prepare the required documentation and submit the request to the Registrar. Seeking professional guidance or consulting a reputable corporate service provider can ensure compliance with regulations and a seamless transition to the new financial year end in Singapore.

Is It Possible For A Company To Have A Financial Year That Does Not Span Precisely 12 Months?

Companies have the flexibility to adopt a financial year end in Singapore that deviates from the standard 12-month period. Instead, they can choose a 52-week accounting period to suit their requirements. To implement this alternative approach, companies must inform ACRA about the decision.

For instance, if a company decides to begin a 52-week accounting period starting on Wednesday, 1 January 2020, its financial year end will be on Wednesday, 30 December 2020. This adjusted financial year end signifies the company’s accounting cycle completion for that particular year.

How We Can Help

At Premia TNC, our experienced professionals provide tailored advisory services to help you choose the right financial year-end for your business. We consider factors like tax exemptions, business cycles, and compliance requirements to guide you in making an informed decision.

With our in-depth understanding of the financial year end in Singapore, we offer expert insights and recommendations. We stay updated on regulations and industry trends, providing valuable advice to optimize your financial management practices and align your financial year end with your operations.

Premia TNC is dedicated to providing ongoing support and assistance beyond the initial financial year end selection and change. Contact us today for a FREE consultation, and let us be your trusted partner in managing your financial year end in Singapore.


Why establish a financial year end in Singapore?

Establishing a financial year end enables streamlined accounting practices, organized records, and regular financial evaluation.

What does the financial year end represent?

The financial year end marks the last day of a company's accounting period in Singapore, providing a reference point for financial reporting and analysis.

How long can an accounting period be in Singapore?

In Singapore, companies can choose a 12-month or 52-week accounting period based on operational needs and compliance requirements.

How does a 52-week financial year aid financial reporting?

A 52-week financial year facilitates consistent reporting, comparison of results, trend analysis, and a clearer view of seasonal business performance.

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