![\"\"](\"http:\/\/www.biztreemgmt.com\/wordpress\/wp-content\/uploads\/2018\/03\/IRAS.jpg\")
<\/p>\nFinancial Year end refer to the date when the Company closed their Accounting\u00a0\u00a0year . Most of the Company will fixed it on calender year basic\u00a0, 12 months .<\/p>\n
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The reason\u00a0behind to fixed the year end , is to ease the Company management to :<\/p>\n
-judge company performance<\/p>\n
-identify weakness and fixed it<\/p>\n
-planning for next year<\/p>\n
-better budget control<\/p>\n
-to\u00a0meet\u00a0 authorities compliance<\/p>\n
How do we fixed year end ?<\/strong><\/p>\n Authority have not imposed any measurement on this.<\/p>\n It is up to management to decide their accounting year end period , it can be more that 12 months or less than it .<\/p>\n However ,we strongly suggest to fixed the year end within 12 months to alight with IRAS tax exemption benefit<\/p>\n Example :<\/p>\n Date of incorporation is on 1\u00a0April 2018<\/strong><\/p>\n Scenario 1<\/strong><\/p>\n Accounting Year End Fixed on 31 March 2019<\/p>\n Accounting period covered 12 months<\/p>\n IRAS will treated as 1 Year Assessment (YA)<\/p>\n Scenario 2<\/strong><\/p>\n Accounting Year End fixed on 31 December 2018<\/p>\n Accounting period covered less than 12 months<\/p>\n IRAS will treated as 1 Year Assessment (YA)<\/p>\n Scenario 3<\/strong><\/p>\n Accounting Year End fixed on 30 June 2019<\/p>\n Accounting period covered\u00a0more than 12 months<\/p>\n IRAS will treated as 2 Year Assessment (YA) :<\/em><\/strong><\/p>\n 1 YA from 1 April 2018 till 31 March 2019<\/p>\n 2nd YA from 1 April 2019 till 30 June 2019<\/p>\n Which scenario is better ?<\/strong><\/p>\n The key factor here is how much the Company’s\u00a0 chargeable income\u00a0will be ?<\/p>\n If Company’s chargeable income is expected more than 100k, is adviseable to fixed the year end within 12 months to enjoy tax exemption .<\/p>\n Example\u00a0:<\/p>\n Date of Incorporation :\u00a030 April\u00a02018<\/p>\n Accounting Year end Fixed : 30 June 2019<\/p>\n Company’s Revenue 350k<\/p>\n 1 YA : 30 April 2018 till 31 March 2019<\/p>\n ($100k will be 100 % tax Exemption )<\/em><\/p>\n 2 YA : 1 April 2019 till 30 June 2019<\/p>\n ($250k will be 50% tax exemption ) <\/em><\/p>\n Accounting Year end vs Year Assessment<\/strong> (YA)<\/p>\n Public always confuse about accounting Year end and Year Assessment (YA)<\/p>\n![\"\"](\"http:\/\/www.biztreemgmt.com\/wordpress\/wp-content\/uploads\/2018\/03\/IRAS-tax-exemption.jpg\")
<\/p>\n‘Year of Assessment’ (YA) refers to the year in which income tax is calculated and charged.\u00a0The\u00a0assessment is for the income earned in the preceding year, starting\u00a0on 1 Jan and ending on 31 Dec.<\/span><\/h2>\n