When incorporating a company in Singapore, foreign founders often focus on big-ticket items such as shareholding structure, director requirements, and bank account opening. One area that tends to receive less attention at the outset, but can have significant operational and tax implications, is the fiscal year of the company.
Selecting a fiscal year is not just a formality as it affects your statutory filings, tax deadlines, audit requirements, and even how you plan your cash flow and business reporting. For foreign entrepreneurs who are unfamiliar with Singapore’s regulatory framework, getting this right from the start can save time, costs, and compliance headaches later on.
This article explains what a fiscal year is in the Singapore context, how it applies to newly incorporated companies, and what foreign business owners should consider when deciding on their company’s fiscal year.
What is a fiscal year in Singapore?
A fiscal year refers to a 12-month accounting period used by a company for financial reporting and tax purposes. In Singapore, this period is commonly referred to as the Financial Year End, often abbreviated as FYE.
During each fiscal year, a company records its income, expenses, assets, and liabilities. These figures are then used to prepare financial statements, file annual returns with the Accounting and Corporate Regulatory Authority, and submit corporate income tax filings to the Inland Revenue Authority of Singapore.
A fiscal year does not need to follow the calendar year. While some companies choose 31 December as their FYE, others opt for different dates such as 31 March, 30 June, or 30 September. The choice often depends on business operations, group reporting requirements, or tax planning considerations.
Fiscal year and newly incorporated companies
For a newly incorporated Singapore company, the first fiscal year can be longer than 12 months. Under Singapore regulations, the first financial year may extend up to a maximum of 18 months from the date of incorporation.
For example, if a company is incorporated on 1 July 2026, it may choose its first FYE as 31 December 2027. This gives the company a longer initial accounting period, which can be useful for startups that need time to commence operations or generate revenue.
After the first fiscal year, all subsequent financial years must be 12 months in length unless the company changes its FYE with proper regulatory filings.
Why the fiscal year matters for foreign business owners
For foreign entrepreneurs, the fiscal year impacts far more than accounting paperwork. It influences how and when you meet your legal obligations in Singapore.
Key areas affected include:
- Corporate income tax filing timelines
- Annual return filing with ACRA
- Audit requirements and exemptions
- Cash flow planning for tax payments
- Group consolidation for multinational companies
Choosing an unsuitable fiscal year can result in compressed deadlines, higher compliance costs, or unnecessary administrative pressure, especially if the company operates across multiple jurisdictions.
Common fiscal year choices in Singapore
There is no single best fiscal year that applies to all companies. However, certain FYE dates are more commonly chosen due to practical reasons.
31 December
This aligns with the calendar year and is often chosen by companies with simple operations or owners who prefer straightforward reporting. It can be convenient, but it also coincides with peak filing seasons for accountants and auditors, which may result in higher professional fees.
31 March
This is popular among companies with regional or international operations, particularly those aligned with the financial year used in countries such as India or Japan. It also spreads compliance work away from year-end congestion.
30 June or 30 September
These are often selected for tax planning reasons or to align with a foreign parent company’s reporting cycle. They can also help stagger internal reporting deadlines.
Fiscal year and corporate income tax in Singapore
Singapore operates on a preceding year basis for corporate income tax. This means that income earned during a fiscal year is assessed in the following Year of Assessment, commonly referred to as YA.
For example, if a company’s fiscal year ends on 31 December 2026, the income earned during that period will be assessed in YA 2027.
Companies are required to file two main tax submissions:
- Estimated Chargeable Income, usually within three months from the fiscal year end
- Corporate income tax return, typically by 30 November of the relevant Year of Assessment
The chosen fiscal year determines when these filings are due. For foreign founders unfamiliar with Singapore’s tax calendar, an ill-timed FYE may result in tight deadlines shortly after incorporation.
Fiscal year planning and tax exemption benefits
The choice of fiscal year can also affect how a Singapore company benefits from available tax exemption schemes. These exemptions are applied based on the company’s Year of Assessment, which is determined by its financial year end.
For newly incorporated companies, tax exemptions may apply to a portion of chargeable income for the first three Years of Assessment. How income is spread across these Years of Assessment depends on the chosen fiscal year and the length of the first accounting period.
The example below illustrates how different financial year end choices affect the timing of the first three Years of Assessment for a new company incorporated on 14 November 2025.
|
Financial Year End |
Year of Assessment |
Period Covered |
|
31 Oct 2026 |
YA 2027 |
27 Nov 2025 to 31 Oct 2026 |
|
|
YA 2028 |
1 Nov 2026 to 31 Oct 2027 |
|
|
YA 2029 |
1 Nov 2027 to 31 Oct 2028 |
|
31 Dec 2026 |
YA 2026 |
14 Nov 2025 to 31 Dec 2025 |
|
|
YA 2027 |
1 Jan 2026 to 31 Dec 2026 |
|
|
YA 2028 |
1 Jan 2027 to 31 Dec 2027 |
Depending on when the company expects to generate profits, choosing an appropriate financial year end can help spread income more effectively across the qualifying Years of Assessment and improve the overall use of available tax exemptions. For foreign business owners, this is often an area where early planning can lead to meaningful tax efficiency.
Impact on audit requirements
Not all Singapore companies are required to be audited. Small companies that meet certain criteria may qualify for audit exemption.
However, when an audit must be completed depends on the fiscal year. Companies with longer first financial years or complex group structures should plan carefully to ensure audit timelines can be met.
Foreign-owned companies, particularly subsidiaries of overseas corporations, often underestimate the time needed for audit preparation. Aligning the fiscal year with group reporting cycles can significantly reduce duplication of work.
Changing the fiscal year after incorporation
It is possible to change a company’s fiscal year after incorporation, but this should be done cautiously.
Changing the FYE requires notification to ACRA and may affect tax filings, audit periods, and internal reporting. In some cases, approval from regulators may be required, especially if the change results in an unusually long financial year, or if the change takes place within five years from the end of a previously revised FYE.
From a compliance standpoint, it is generally more efficient to choose the right fiscal year at the incorporation stage rather than making changes later.
Considerations for foreign-owned and group companies
Foreign entrepreneurs incorporating in Singapore often do so as part of a wider international structure. In such cases, the fiscal year should be considered in the context of the overall group.
Key questions include:
- Does the parent company have a fixed reporting cycle?
- Are consolidated financial statements required?
- Will the Singapore entity need to align with overseas tax reporting deadlines?
Aligning the Singapore company’s fiscal year with that of the parent company can simplify consolidation and reduce administrative burden. However, this must be balanced against local tax and compliance considerations.
Practical mistakes to avoid
Foreign founders commonly make the following mistakes when selecting a fiscal year:
- Choosing an FYE without understanding tax filing deadlines
- Selecting 31 December without considering year-end compliance congestion
- Overlooking the impact on audit timelines
- Failing to align with parent company reporting requirements
These issues are often avoidable with proper advice at the incorporation stage.
How Premia TNC can help
Choosing a fiscal year may seem straightforward, but it has long-term implications for compliance, taxation, and operational efficiency. For foreign entrepreneurs who are new to Singapore, engaging a corporate service provider, like Premia TNC, can help ensure that the decision is aligned with both local regulations and international business needs.
Premia TNC can:
- Advise on an appropriate fiscal year
- Assist with Singapore company incorporation
- Coordinate tax, accounting and compliance timelines
- Handle statutory filings and annual returns
- Support audit and accounting requirements where applicable
- Provide ongoing corporate secretarial services
This allows foreign business owners to focus on growing their business while remaining compliant with Singapore’s regulatory framework. If you are planning to set up a company in Singapore and would like guidance on choosing the right fiscal year, professional advice at the incorporation stage can make all the difference.