Financial year end for a Hong Kong company

Financial Year End for a Hong Kong Company

The financial year end closes a company's annual accounting period. Directors choose this date, which becomes the company's accounting reference date. This date aligns with the business cycle, not the calendar year.

Hong Kong Company Year End

Your financial year end sets the deadlines for filing the profits tax return and preparing audited financial statements. It also establishes the basis period for the year of assessment the Inland Revenue Department uses to levy profits tax.

Choosing Financial Year End Hong Kong

The company sets its accounting reference date upon incorporation. Any calendar date is permissible, though 31 March and 31 December are common. Choose a date that fits your natural trading cycle and allows time for the audit.

Financial Year End Date

Once set, this date governs your entire compliance calendar. Prepare financial statements to this date and have them audited by an HKICPA-registered practice. File them with the profits tax return. The accounting period must not exceed 12 months unless you change your accounting reference date.

Accounting Period Hong Kong

The accounting period runs from one financial year end to the next. Maintain proper accounting records for this period and retain them for seven years. To change your financial year end, file Form NAC4 with the Companies Registry to notify the Registrar of the change of accounting date.

Reporting and Compliance

• Directors must table the audited financial statements at the annual general meeting or circulate them to members if the meeting is dispensed with.
• The profits tax return (BIR51) is issued based on the accounting period and the year of assessment.
• A company qualifying under the reporting exemption (section 359 of the Companies Ordinance) may prepare financial statements using the SME-FRF and SME-FRS framework, but the audit requirement remains.

Practical Considerations

• A 31 March or 31 December year end simplifies tax planning and aligns with the Inland Revenue Department's block extension scheme.
• Changing the accounting reference date mid-cycle requires a formal notice and may affect the basis period for tax.
• Consult the Companies Registry or a qualified professional before altering the date. The procedure depends on whether the change shortens or lengthens the accounting period.