Choosing an accounting financial year-end (“FYE”) is more strategic than simply picking a date. The FYE dictates every statutory deadline you face: audits, MBRS filings, tax estimates (CP204), SST returns, payroll reporting, even bonus cycles. Below is a concise, law-based framework to help directors set – or change – the FYE for a Sdn Bhd, LLP, enterprise or branch.
1 | Legal Framework at a Glance
| Requirement | Where It Comes From | Key Points |
|---|---|---|
| Directors may fix any FYE | s. 247 CA 2016 | First FYE can end any date ≤ 18 mths after incorporation. |
| Prepare 1st audited FS | s. 248(1) | Within that 18-month window. |
| Circulate & lodge FS | s. 258 & s. 259 | Circulate - 6 mths after FYE; lodge with SSM - 30 days after circulation. |
| Change of FYE | s. 247(5) | File Form Change of FYE within 30 days; SSM approval needed if the new period > 18 mths or if previous change < 5 yrs ago for public/G* company. |
| Tax basis period | IRB public ruling 6/2021 | YA = accounting period ending in calendar year. |
G = Guarantee or foreign branch.
2 | Popular FYE Choices & Why
| FYE | Good For | Watch-outs |
|---|---|---|
| 31 Dec (Calendar) | Multinationals; aligns with group consolidation, global audit cycle | Peak audit season → higher fees, slower bankers |
| 30 Jun | Seasonal businesses (school supplies, agriculture) finish sales cycle | Two rounds of SST half-year returns overlap (Jan & Jul) |
| 31 Mar / 30 Apr | Construction, government suppliers – lets you wrap after fiscal-budget frenzy | YA straddles two SST periods; CP204 estimate due 3 mths before year start |
| Last day of any quarter | Easy quarter/half-year management reporting | — |
3 | Commercial Factors to Weigh
- Group Alignment – parent audits run smoother if all subsidiaries share an FYE.
- Cash-flow Seasonality – finish when inventory is low and receivables are high to show a healthier balance sheet.
- Audit Resource Availability – avoid 31 Dec if you want lower fees and faster sign-off.
-
Tax Optimisation –
- Short first year (< 12 mths) can accelerate SME 15 % / 17 % tax bands.
- Long first year (up to 18 mths) defers your first CP204 instalments.
- Government Grants & Contracts may stipulate a calendar FYE for reporting.
4 | How to Fix the Initial FYE (New Company)
| Step | Action |
|---|---|
| 1 | At first board meeting, pass resolution: “That the company’s financial year shall end on ✻ ✻ ✻.” |
| 2 | Inform company secretary → they record the FYE in Super Form (Section 14) during incorporation. |
| 3 | Register tax file (CP600C) → IRB auto-captures the FYE. |
| 4 | Plan CP204 tax estimate: due 3 mths before start of 2nd basis period (or within 3 mths of operation for first year). |
5 | Changing an Existing FYE – Checklist
- Board resolution stating old & new FYE and reason (e.g. group alignment).
- File “Change of Financial Year End” via MyCoID (RM 100 fee).
-
Obtain SSM approval if:
- new financial period > 18 months; OR
- previous change occurred < 5 years ago (public/G companies).
- Notify Inland Revenue – e-CP204A within 30 days of change.
- Update EPF/SOCSO, SST, MBRS calendars and inform auditors.
Tip: Lodge the change before the old FYE arrives, or IRB will still expect tax filings on the original date.
6 | Regulatory Deadlines Driven by FYE
| Filing | Deadline |
|---|---|
| Audit sign-off & circulation | 6 months after FYE |
| MBRS 2.0 XBRL filing | 30 days after circulation |
| Tax Return (Form C) | 7 months after FYE (e-Filing) |
| CP204 next-year estimate | 30 days before new YA starts |
| SST half-year return (if registered) | By last day of next month following 6-month taxable period |
7 | Common Pitfalls & Remedies
| Pitfall | Fix |
|---|---|
| Picking 31 Dec but business starts only in Oct – first FS spans 15 mths, leaving < 3 mths for audit | Choose 30 Jun or 30 Sep, then switch later if needed |
| Forgetting IRB update after change | File e-CP204A promptly; else instalments follow the wrong cycle |
| Two FYE changes inside 24 mths | SSM will reject unless exceptional circumstances shown |
| Group uses multiple FYEs | Consolidation headache → aim to unify at next change window |
8 | Quick Decision Flow
Does parent / HQ mandate a date? ─► Yes → Adopt same FYE No ▼ Is business seasonal? ─► End after peak sales or project cycle ▼ Do you want SME tax earlier? ─► Short first period (<12 mths) ▼ Avoid Dec-audit jam? ─► Pick Mar/Jun/Sep
9 | Our Turn-Key FYE Advisory Service
- Compare tax impact scenarios (short vs long first year).
- Draft board resolution & lodge Change of FYE with SSM.
- Revise CP204 / CP204A and brief your finance team on new deadlines.
Last Updated: 28-Apr-2025