The Financial Year End (FYE) essentially refers to a company’s annual financial accounting period. In Hong Kong, companies can choose their own financial year-end date, also known as the accounting year-end. The chosen date has significant implications for both operational and tax aspects, with careful consideration required to align accounting and tax perspectives.
When is it Good to Have a Financial Year End?
From an accounting standpoint, it is advisable to synchronise the Financial year end with the holding company’s date, simplifying the preparation of individual and consolidated financial statements. This alignment streamlines the auditing process, reducing accounting and audit fees. Common year-end dates in Hong Kong are 31 December or 31 March.
Considering the tax aspect, a Hong Kong-based company’s first tax profit returns are expected 18 months after incorporation. The financial year-end date declared in the tax return form determines subsequent submission deadlines. Choosing a date aligned with business cycles can ease the workload during peak sales.
While a company’s financial year end does not need to match its incorporation date, careful selection is crucial. Many Hong Kong companies prefer calendar year ends like 31 December or 31 March. The chosen date influences profit tax payment timing. Changing the financial year end is possible, but certain restrictions apply, and consultation with accounting professionals is recommended.
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To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
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Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
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The Financial Year End (FYE) essentially refers to a company’s annual financial accounting period. In Hong Kong, companies can choose their own financial year-end date, also known as the accounting year-end. The chosen date has significant implications for both operational and tax aspects, with careful consideration required to align accounting and tax perspectives.