As the end of the calendar year approaches a lot of companies in China are busy making preparations for the end of the Chinese financial year.
Whilst you are getting ready to celebrate the new year, spare a thought for the overworked Chinese accountants, because the financial year in Mainland China follows the calendar year and ends on 31 December.
But is that also the case for businesses in Taiwan, Hong Kong and Macau? Is there a unified Chinese Financial Year?
China adopted use of the Gregorian calendar on 1 January 1912 and it is know as the "Public Calendar" (公历).
Although many Chinese follow the lunar calendar for birthdays and festivals, when it comes to business the international "Gregorian" calendar is always followed.
If you are discussing financial years in China there should be no misunderstandings over the calendar!
The first thing to understand is that there is no uniform "Chinese Financial Year" as the financial year depends on which Chinese jurisdiction a company is registered in.
Regulations on companies differ between Mainland China, Hong Kong, Macau and Taiwan, including reporting requirements.
In Mainland China the financial year follows the Gregorian calendar:
This is according to China's Accounting Law (Chapter 2, Article 11) which was first published in 1985.
In Hong Kong the government's financial year follows the same pattern of many Commonwealth countries:
Even though Hong Kong limited companies are free to choose their own fiscal year, most follow the government's standard.
For unincorporated Hong Kong businesses this standard must be followed.
In Macau, the financial year also followed the Gregorian calendar:
In Macau tax assessments are filled with the Financial Services Bureau.
Similar to Mainland China and Macau, Taiwan's financial year also follows the Gregorian calendar:
It is possible for Taiwanese companies to follow a different fiscal year if they obtain approval from the local tax authority.
This chart gives a simple overview of the financial years in the different Chinese jurisdictions:
|Jan (following year)|
|Feb (following year)|
|Mar (following year)|
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