Change of fiscal year-end

Fiscal year-end is also known as the tax year-end or financial year of your business. Fiscal year-end is determined by your business structure.

See the topics below to learn about the fiscal year-end of your busines:

Corporation income tax

Generally, unless you have received approval to change the tax year-end, the corporation’s fiscal period is the same from year to year.

To change a fiscal period, write a letter to your tax services office asking for approval and include details to explain the reasons for the change. If you do not include the reasons for requesting the change, we may delay in processing your request.

In some situations, you do not need approval to change the fiscal period. These situations include the following:

  • The corporation has wound-up and you are filing its final return with an abbreviated fiscal period
  • The corporation has to end its tax year at a certain time because it is emigrating to another country, becoming exempt from tax, or ceasing to be exempt from tax
  • A person or a group of persons acquired control of the corporation under subsection 249(4)

Note

A corporation that becomes bankrupt must get our approval to change its fiscal period.

Self-employed individuals (personal income tax)

Generally, you have to report your business income from a business carried on in Canada on a calendar-year basis. A calendar year is January 1st to December 31st. This rule affects sole proprietorships, professional corporations that are partners of a partnership, and partnerships in which at least one partner of the partnership is an individual, professional corporation, or another affected partnership.

You may be able to use an alternative method of reporting your business income. The alternative method allows you to have a fiscal period that does not end on December 31. The alternative method is only available, on a per business basis, for businesses carried on in Canada by individuals or partnerships of which all the partners are individuals.

You cannot use the alternative method if:

  • you are in partnerships that are partners in other partnerships
  • you are an individual who is a partner in a partnership that includes a professional corporation as a partner
  • the expenditures made in the course of carrying on the business are primarily the cost or capital cost of tax-shelter investments
  • you have already elected to use the alternative method and then cancelled the election
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