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?
Lunar Calendar / Gregorian Calendar
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!
When is the Chinese Financial Year?
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.
Reflecting this is the fact that each jurisdiction has its own currency.
Mainland China Financial Year
In Mainland China the financial year follows the Gregorian calendar:
- Start date: 1 January
- End date: 31 December
This is according to China's Accounting Law (Chapter 2, Article 11) which was first published in 1985.
Hong Kong Financial Year
In Hong Kong the government's financial year follows the same pattern of many Commonwealth countries:
- Start date: 1 April
- End date: 31 March (in the following year)
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.
Macau Financial Year
In Macau, the financial year also followed the Gregorian calendar:
- Start date: 1 January
- End date: 31 December
In Macau tax assessments are filled with the Financial Services Bureau.
Taiwan Financial Year
Similar to Mainland China and Macau, Taiwan's financial year also follows the Gregorian calendar:
- Start date: 1 January
- End date: 31 December
It is possible for Taiwanese companies to follow a different fiscal year if they obtain approval from the local tax authority.
Chinese Financial Year Chart
This chart gives a simple overview of the financial years in the different Chinese jurisdictions:
ChinaHong KongMacauTaiwanJanJanJanFebFebFebMarMarMarAprAprAprAprMayMayMayMayJunJunJunJunJulJulJulJulAugAugAugAugSepSepSepSepOctOctOctOctNovNovNovNovDecDecDecDecJan (following year)Feb (following year)Mar (following year)
Did a China Company Submit Their Annual Return?
All Chinese companies are required to submit an annual return and confirming that an annual return has been submitted is a good indication that a company is still active and without abnormal business operations.
China Checkup's company verification reports conveniently get you access to the publicly disclosed information from such filings. Although financial information is rarely disclosed, significant registration changes can be revealed.
