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"&amp;lt;h3&amp;gt;Definition&amp;lt;/h3&amp;gt;&amp;lt;p&amp;gt;&amp;lt;strong&amp;gt;A fiscal year&amp;lt;/strong&amp;gt; is your business&amp;amp;#39;s annual reporting period. All kinds of reports are based on the fiscal year, including taxes.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;The fiscal year is generally a twelve month period \u2013 although the fiscal year period may be shorter for a business that has just started or for a business that ends. (See\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/the-steps-to-closing-a-business-in-canada-2948040&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;The Right Way to Permanently Close Your Canadian Business\u00A0&amp;lt;/a&amp;gt;\u00A0for information on how to properly close your sole proprietorship, partnership or corporation.)&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;For most businesses, the fiscal year runs from January 1st through December 31st. In Canada, some businesses may have different fiscal year periods. &amp;lt;a href=&amp;quot;https://www.thebalance.com/types-of-corporations-in-canada-2948060&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;2&amp;quot;&amp;gt;Corporations&amp;lt;/a&amp;gt; can choose to have fiscal year periods that end on any date. &amp;lt;a href=&amp;quot;https://www.thebalance.com/sole-proprietorship-2947269&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;3&amp;quot;&amp;gt;Sole proprietorships&amp;lt;/a&amp;gt; and &amp;lt;a href=&amp;quot;https://www.thebalance.com/partnership-in-canada-2948122&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;4&amp;quot;&amp;gt;partnerships&amp;lt;/a&amp;gt; composed of members that are all individuals can also choose to have a different fiscal year end period.&amp;lt;/p&amp;gt;&amp;lt;h3&amp;gt;When Do I Have to Decide on My Fiscal Year-End Date After Starting a New Business?&amp;lt;/h3&amp;gt;&amp;lt;ul&amp;gt;&amp;lt;li&amp;gt;For &amp;lt;strong&amp;gt;corporations&amp;lt;/strong&amp;gt;\u00A0your fiscal year-end date must be within 53 weeks of your &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-incorporate-your-business-in-canada-2948225&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;5&amp;quot;&amp;gt;incorporation&amp;lt;/a&amp;gt; date. The year-end date is set once you file your first &amp;lt;a href=&amp;quot;https://www.thebalance.com/when-must-canadian-corporate-income-tax-returns-be-filed-2948647&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;6&amp;quot;&amp;gt;corporate tax (T2) return&amp;lt;/a&amp;gt;.&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;For &amp;lt;strong&amp;gt;sole proprietorships and partnerships&amp;lt;/strong&amp;gt; you must apply to the &amp;lt;a href=&amp;quot;http://www.cra-arc.gc.ca/menu-eng.html&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;externalLink&amp;quot; data-ordinal=&amp;quot;7&amp;quot;&amp;gt;Canada Revenue Agency (CRA)&amp;lt;/a&amp;gt; for approval to change your fiscal year-end to something other than December 31st, by filling in\u00A0Form T1139,\u00A0&amp;lt;a href=&amp;quot;http://www.cra-arc.gc.ca/E/pbg/tf/t1139/README.html&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;externalLink&amp;quot; data-ordinal=&amp;quot;8&amp;quot;&amp;gt;Reconciliation of Business Income for Tax Purposes&amp;lt;/a&amp;gt;. There is no guarantee that the CRA will approve your request.&amp;lt;/li&amp;gt;&amp;lt;/ul&amp;gt;&amp;lt;h3&amp;gt;Why Might You Choose a Fiscal Year That Does Not End on December 31st?&amp;lt;/h3&amp;gt;&amp;lt;p&amp;gt;There are a number of reasons why companies choose to have a different fiscal year, including:&amp;lt;/p&amp;gt;&amp;lt;ul&amp;gt;&amp;lt;li&amp;gt;Business is seasonal so choosing a fiscal year-end date to coincide with a slack time in the business gives management more time to work on &amp;lt;a href=&amp;quot;https://www.thebalance.com/effictive-planning-principles-for-small-businesses-2947987&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;9&amp;quot;&amp;gt;business planning&amp;lt;/a&amp;gt;\u00A0and budgeting and &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-find-a-good-accountant-for-your-small-business-2947890&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;10&amp;quot;&amp;gt;accountants&amp;lt;/a&amp;gt; and bookkeepers more time to reconcile accounts and prepare &amp;lt;a href=&amp;quot;https://www.thebalance.com/canadian-income-tax-and-your-small-business-2948640&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;11&amp;quot;&amp;gt;tax returns&amp;lt;/a&amp;gt; and &amp;lt;a href=&amp;quot;https://www.thebalance.com/writing-the-business-plan-section-8-2947026&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;12&amp;quot;&amp;gt;financial reports&amp;lt;/a&amp;gt;. If the business is retail the level of inventory is typically at its lowest during slack periods, making counting easier. Seasonal businesses tend to increase &amp;lt;a href=&amp;quot;https://www.thebalance.com/the-hiring-process-hiring-employees-in-canada-2948196&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;13&amp;quot;&amp;gt;hiring&amp;lt;/a&amp;gt; during busy seasons and reduce head counts during off-season. Having their fiscal year-end coincide with seasonal layoffs can be advantageous for bookkeeping purposes.&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;Accounting firms are generally busiest in the period following the end of the calendar year, so choosing a different fiscal year end may allow the business to get a reduction in the cost of accounting services, as well as faster turnaround.&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;A business has been acquired by another business and the fiscal year-end needs to be changed to match that of the purchasing business.&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;The business is closing part way through the current fiscal year so the year-end needs to be changed to the date when the business ceases operations.&amp;lt;/li&amp;gt;&amp;lt;/ul&amp;gt;&amp;lt;p&amp;gt;If you start a business that is a sole proprietorship, a partnership such as the one described above, or a corporation, you can choose to have a different fiscal year by filling out and filing Form T1139, &amp;lt;a href=&amp;quot;http://www.cra-arc.gc.ca/E/pbg/tf/t1139/README.html&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;externalLink&amp;quot; data-ordinal=&amp;quot;14&amp;quot;&amp;gt;Reconciliation of Business Income for Tax Purposes&amp;lt;/a&amp;gt;.&amp;lt;/p&amp;gt;&amp;lt;h3&amp;gt;Can I Change My Fiscal Year End?&amp;lt;/h3&amp;gt;&amp;lt;p&amp;gt;Except in special circumstances such as closing or relocating a business out of the country you must apply to the CRA to change your fiscal year-end. The CRA policy is that changing the fiscal year will only be allowed for\u00A0&amp;amp;#34;Sound Business Reasons&amp;amp;#34; - in other words if the CRA deems that you are requesting a change to (for example) reduce your tax burden or strictly for personal convenience the request will be rejected&amp;lt;strong&amp;gt;.\u00A0&amp;lt;/strong&amp;gt;&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;For information on how to apply to the CRA to change your&amp;lt;strong&amp;gt;\u00A0&amp;lt;/strong&amp;gt;fiscal year period see &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-change-the-fiscal-year-end-of-a-canadian-business-2948648&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;15&amp;quot;&amp;gt;How Do I Change my Fiscal Year End?&amp;lt;/a&amp;gt;&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Choosing a different fiscal year end date should be considered carefully, however, because it will affect all your other reporting obligations. For instance, if your business is &amp;lt;a href=&amp;quot;https://www.thebalance.com/starting-a-business-register-for-the-gst-hst-2948147&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;16&amp;quot;&amp;gt;registered for the GST/HST&amp;lt;/a&amp;gt;, your GST/HST reporting periods, filing and remitting due dates will be affected.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;&amp;lt;strong&amp;gt;Also Known As: &amp;lt;/strong&amp;gt;Fiscal period.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;&amp;lt;strong&amp;gt;Examples: &amp;lt;/strong&amp;gt;Verity chose to have a fiscal year end date of July 31st for her ski shop business so she could prepare her income taxes during her business&amp;amp;#39;s slow season.&amp;lt;/p&amp;gt;"^^<http://www.w3.org/2001/XMLSchema#string>
<https://www.thebalance.com/fiscal-year-2947889>