How to choose a fiscal year end date for a Hong Kong company?

Fiscal Year End Date – Hong Kong Accounting and Taxation

What is fiscal year end date?

A fiscal year is any 12 consecutive months adopted by a company for the purposes of financial reporting and the fiscal year end date is the account closing date of the company’s financial year. Most companies will prepare its financial statement at the end of its fiscal year for the purpose of tax filing and management review. Some companies also prepare interim financial reports that cover 1 to 3 months of activities to show timely financial information for decision maker to make promptly business decisions.

How to choose a fiscal year end date?

Choosing the right fiscal year end date provide a company both operational and tax advantages.

Most companies in Hong Kong choose to fix its fiscal year end date at the end of the calendar year, 31 Dec or set on 31 Mar in order to align with the Hong Kong government’s fiscal and financial year. Fiscal year vary between businesses and countries. See worldwide government fiscal year end date.

A company’s fiscal year does not need to consist with its incorporation date or anniversary date. A company has the flexibility to determine its financial year according to their business cycles. You can choose any date of the year as the fiscal year end date. Some companies choose to end its financial year aligning with the calendar year, 31 Dec to make reconciliation with other accounts, like payroll and operation expenses. A Hong Kong company with US headquarter may end its financial year based on the financial year end of its head office, 30 Sep.

A newly incorporated company can also fix any date in the year as the fiscal year end date. For example, if your company is incorporated on 1 June, you can fix the fiscal year end date at 31 Dec.