Basis period and Year of Assessment
A company is taxed on the income earned in the preceding financial year. This means that income earned in the financial year 2019 will be taxed in 2020.
To assess the amount of tax, IRAS looks at the income, expenses, etc. during the financial year.
This financial year is known as the "basis period".
The basis period is generally a 12-month period preceding the YA.
Examples based on different Financial Year Ends
|Financial Year End
|31 Mar of each year
||1 Apr 2018 to 31 Mar 2019
|30 Jun of each year
||1 Jul 2018 to 30 Jun 2019
|31 Dec of each year
||1 Jan 2019 to 31 Dec 2019
The same rule applies to new companies.