Basis Period and Year of Assessment

Income is assessed on a preceding year basis. This means that the basis period for any Year of Assessment (YA) is the financial year ending in the year preceding the YA. The examples below illustrate the concept of basis period and YA:

Examples

• If your financial year end is 31 Mar of each year, the basis period for YA 2011 is 1 Apr 2009 to 31 Mar 2010.
• If your financial year end is 31 Dec of each year, the basis period for YA 2011 is 1 Jan 2010 to 31 Dec 2010.

If your company’s first set of accounts cover a period of more than 12 months from the date of incorporation, the income must be apportioned to two YAs because the basis period for each YA cannot exceed 12 months.  Please see example as follows:

Example

Company A is incorporated in Singapore on 15 Apr 2009. The financial year end of the company is 30 Jun. Company A’s first set of accounts is prepared for the period from 15 Apr 2009 to 30 Jun 2010.

As the first set of accounts covered a period of more than 12 months, there are two relevant YAs as follows:

It is therefore necessary to apportion the profits / losses on time basis to YA 2010 and YA 2011 respectively and prepare tax computations for the two YAs for tax submission in 2011.