The financial year as per Singapore Laws is generally of 12 months( extendable upto 18 months in the first year after the incorporation of the company) or 52 weeks. The Companies Act in Singapore does not restrict companies with any specific timeline for financial year end ( FYE)and thus companies have to self determine the FYE i.e the accounting period of the company. Singapore also does not mandate a company to follow calendar year and thus such FYE can be at any time of the year. With such liberty of choosing the FYE, Singapore also provides for freely changing the FYE of the company.
Change in FYE can be made for current year or immediately preceding financial year. However, there are some restrictions imposed herein by the law. The companies are permitted to change its FYE only if it has not passed the statutory deadlines for the holding of AGM, filing of AR or sending of financial statements. The Companies which have passed these statutory compliances due dates cannot change their FYE. It is also pertinent to note that with this alteration in FYE, various statutory deadlines (i.e. Filing of Estimated Chargeable Income (ECI), holding of AGM, filing of Annual Returns , basis period for assessing corporate tax) shall also change. Thus, a check and planning with respect to these due dates is a must so as to avoid any non compliance.
It is imperative that the company update the statutory bodies in case it undergoes such change. Currently, financial year end changes filed with ACRA are not transmitted to IRAS. Thus, both ACRA and IRAS has to be informed separately. Hence the following regulatory compliance has to be followed:
ACRA Compliances for change in FYE of the company
Companies must notify the Registrar of any change in FYE. Companies with FY as 52 weeks should also notify ACRA of this if they want to avoid changing their FYE every year. Transactions for notification/change of FYE will provide for this . However, in some cases prior approval of the registrar is required with appropriate reason to change the FYE when-
- The change in FYE will result in a financial year of more than 18 months; or
- The previously changed the FYE was changed on or after 31 August 2018 for a financial year ending on or after 31 August 2018 and it is within 5 years from the end of the previously changed FYE i.e the company has already made changes in its FYE within the last 5 years.
Filing requirements: ACRA must be notified of a change in FYE via the “Change of Financial Year End” transaction through the BizFile+ website. A Board Resolution is also required to be passed approving such change in the FYE.
IRAS compliances for change In FYE of the company
It is important that IRAS is posted of such change. It is with the consideration of such FYE, IRAS shall send the ECI notification letter and any other assessment letters or notices. IRAS prescribes that if the change in FYE results in covering a period of more than 12 months, then the company may have to apportion and attribute the adjusted profit/losses to two different YAs.
Filing requirements: Change in FYE can be brought into IRAS consideration by logging in to mytax.iras.gov.sg and updating via the Update Corporate Profile/ Contact Details e-Service.
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