Fiscal year

Published Tuesday 27 October 2026

Table of contents

• What is a fiscal year?
• The Hong Kong government fiscal year
• Fiscal year vs financial year vs calendar year vs accounting year
• Can companies choose their own year-end?
• Setting your first financial year-end
• How to choose your fiscal year-end
• Why your fiscal year matters
• Profits tax, the year of assessment and key filing dates
• How to change your financial year-end
• Manage your year-end reporting with Xero
• FAQs on fiscal year
• Related terms
• Learn more about fiscal year

Key takeaways

• A fiscal year, also called a financial year, is the 12-month period your business uses for accounting and tax reporting.
• In Hong Kong the government fiscal year and the tax year of assessment both run from 1 April to 31 March.
• A Hong Kong company's directors set its financial year-end, and 31 December and 31 March each line up with a common reporting cycle.
• The Inland Revenue Department assesses profits tax on your accounting period, so your year-end shapes when your Profits Tax Return is due.

What is a fiscal year?

A fiscal year is the 12-month period a business, government or organisation uses for accounting and tax purposes. It sets the timeframe for tracking your income, expenses and financial performance.

Your fiscal year doesn't have to match the calendar year. The term is often used interchangeably with financial year, and both mean the same 12-month accounting period. In Hong Kong the government uses a fixed fiscal year, but your own company can choose a year-end that suits how it trades, which is a core part of small business accounting.

Fiscal years are usually named by their end year. A fiscal year running from 1 April 2025 to 31 March 2026 is commonly referred to as FY26.

The Hong Kong government fiscal year

Hong Kong's government fiscal year and year of assessment run from 1 April to 31 March. The government's budget estimates follow this cycle. The Inland Revenue Department (IRD) uses the same year as the basis for salaries tax and property tax.

So the 2026/27 year of assessment runs from 1 April 2026 to 31 March 2027. Your company doesn't have to follow this cycle for its own accounts, but the government year is the reference point many businesses align to.

Fiscal year vs financial year vs calendar year vs accounting year

These terms are closely related, and in Hong Kong some are used interchangeably. Knowing the distinctions helps you stay clear about your reporting obligations.

• Fiscal year: the 12-month period used for financial reporting. For the Hong Kong government it is 1 April to 31 March; for your company it's whatever year-end you set
• Financial year: used interchangeably with fiscal year, referring to the same 12-month accounting period
• Calendar year: runs from 1 January to 31 December, and your company can also use it as its year-end
• Accounting year: another name for the 12-month period covered by your accounts, defined by your accounting period

The key point is that the government fiscal year is fixed, while your company's financial year is a choice you make when you set your accounting reference date.

Can companies choose their own year-end?

Yes. Your company's directors decide its financial year-end. Two dates line up with common reporting and tax cycles.

• 31 December: matches the calendar year, which suits businesses that report alongside an overseas parent or group
• 31 March: aligns with the Hong Kong government fiscal year and the tax year of assessment

You can also pick another date that suits how your business runs.

Setting your first financial year-end

When you incorporate, your directors can set the company's primary accounting reference date, which fixes its first year-end. The rules for this are in the Companies Ordinance (Cap. 622).

Your first financial year runs from the date of incorporation to that first year-end, which must fall within 18 months of incorporation. If your directors don't pick a date, the default is the last day of the month in which the first anniversary of incorporation falls. Setting this up correctly is part of registering your business and getting your records in order from day one.

How to choose your fiscal year-end

Choosing the right year-end can make your accounting simpler and your reports more useful. Weigh up the main factors below before you decide.

• Revenue cycle: ending your year after your busiest season gives you a complete picture of your peak trading period
• Cash flow: avoid a year-end when cash is tight, since closing the books and paying tax can add extra costs
• Group alignment: if you report to an overseas parent, matching its year-end makes consolidation easier
• Audit timing: choosing an off-peak year-end can make it easier to work with your accountant and manage audit costs

Once your business is established, you can review whether your year-end still fits, and change it if your circumstances shift.

Why your fiscal year matters

Your fiscal year is more than a formality. It shapes how you report, plan and stay compliant across the year.

• Financial reporting: your year-end determines when you prepare annual accounts, financial statements and your balance sheet
• Profits tax filing: your Profits Tax Return deadline with the Inland Revenue Department is tied to your company's accounting year-end
• Budget planning: setting budgets and forecasts around your fiscal year helps you allocate resources and manage cash flow
• Performance tracking: comparing results year on year only works when you measure the same 12-month period each time
• Record keeping: the Inland Revenue Ordinance requires you to keep your business records for at least 7 years

Getting your fiscal year right from the start saves time and reduces the risk of missed deadlines or messy reporting.

Profits tax, the year of assessment and key filing dates

Hong Kong has no VAT, goods and services tax or sales tax, so companies carrying on a business in Hong Kong generally deal with profits tax each year. For profits tax, the IRD taxes the profits of your accounting year that ends within each year of assessment, which is why your year-end matters for filing.

The Inland Revenue Department issues Profits Tax Returns in early April each year, and the normal filing deadline is within 1 month of the date of issue. If a tax representative acts for you, the IRD's Block Extension Scheme can give you more time to file, with the extended due date depending on your accounting date code (N, D or M).

The IRD's block extension letters set out these key dates in the 2026/27 government year for 2025/26 Profits Tax Returns lodged by tax representatives:

• BIR51 issue date: 1 April 2026, when the IRD issued 2025/26 Profits Tax Returns for corporations in bulk
• Code N (accounting date 1 April–30 November 2025): due 1 month after issue, as this code falls outside the block extension
• Code D (accounting date 1–31 December 2025): extended due date of 31 August 2026, or 2 October 2026 for electronic filing, following the IRD's July 2026 update
• Code M (accounting date 1 January–31 March 2026): extended due date of 30 November 2026, or 1 February 2027 for loss cases

For the 2025/26 year of assessment, represented taxpayers with a Code M accounting date (year-ends from 1 January to 31 March 2026) originally had until 16 November 2026 to file their Profits Tax Return, extended to 1 February 2027 for loss cases, as set out in the same IRD circular letter.

On 20 October 2026 the IRD moved the Code M due date to 30 November 2026 for paper returns. If the return is e-filed, the due date is 30 December 2026; for voluntary e-filing, the IRD grants this extra month only on application, which must reach it at least 7 working days before the return would otherwise be due. To get the 1 February 2027 date for a loss case, your tax representative must apply by 2 November 2026. From 1 April 2026, tax representatives must apply for the Block Extension Scheme electronically through the IRD's Tax Representative Portal.

You can confirm the current-year deadlines with the Inland Revenue Department. If you file late without reasonable excuse, the IRD can issue an estimated assessment or start penalty proceedings, so it pays to diarise your dates early.

How to change your financial year-end

You can change your year-end if your business circumstances shift, for example after joining a group or changing your trading pattern.

Your directors can change the year-end by passing a directors' resolution, within limits set by the Companies Ordinance (Cap. 622).

If you change your accounting date, tell the IRD in your profits tax return and give your reasons. Speak to your accountant about the profits tax effect before you move the date.

Manage your year-end reporting with Xero

You can manage your fiscal year with less stress. Xero's cloud-based accounting software keeps your financial data up to date in real time, with bank feeds that pull in transactions automatically so you can reconcile faster.

Customisable financial reports let you track performance across any period, and you can share everything with your accountant or bookkeeper when it's time to close the books. Whether you're preparing year-end accounts or getting ready for your Profits Tax Return, you can see where your business stands and get one month free when you sign up.

FAQs on fiscal year

Here are answers to frequently asked questions about fiscal years in Hong Kong.

What is the difference between a fiscal year and a financial year?

In Hong Kong the two terms mean the same thing: a 12-month period used for accounting and tax reporting. Both can refer to the government year of 1 April to 31 March or to your company's own chosen year-end.

Is the government fiscal year the same as my company's fiscal year?

Not necessarily. The government fiscal year is fixed at 1 April to 31 March, but your company can set its own financial year-end, such as 31 December to match the calendar year.

Can I change my company's fiscal year?

Yes, your directors can change the financial year-end by resolution, within the Companies Ordinance limits. You then report the change and your reasons in your profits tax return.

What happens if I miss the Profits Tax Return deadline?

The Inland Revenue Department can charge penalties and raise an estimated assessment if you file late or not at all. Filing on time, or using the Block Extension Scheme through a tax representative, helps you avoid this.

When does my first financial year-end fall?

Your directors set it when you incorporate, and under the Companies Ordinance it should fall within 18 months of incorporation. Your first set of accounts then covers the period from incorporation to that date.

Related terms

• Balance sheet
• Cash flow
• Net profit
• Profit and loss statement

Learn more about fiscal year

• Small business bookkeeping
• When to hire an accountant
• Accounting and bookkeeping guides