Tax treatment where FY not same as calendar year

Related Topics: | Tax Advice | Tax Administration |

How is the tax treatment of companies whose financial year is not the same as the calendar year?

This Ministry takes note that there are companies whose financial year is not the same as the calendar year. For these companies, the implementation of the current year assessment system beginning from the year 2000 will subject them to financial difficulty even though income derived for the basis period 1999 is waived from tax.

This is because they are still subject to payment of two - year tax in one year. For example, for a company having a financial year from 1 February to 31 January would have to pay tax on income derived during the period 1 February 1999 to 31 January 2000 as well 1 February 2000 to 31 January 2001 in the year 2000.

In line with the objective to avoid the payment of income tax for two years in one year, those companies are required to start making tax payment in the month of January 2000 instead of February 1999 on income derived for the period 1 February 1999 to 31 January 2000. At the same time, those companies will also be allowed to settle their tax on income derived in the basis period 2000 until the end of 2001.

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