Fiscal year

The fiscal year (or financial year) is the 12-month period at the end of which a business prepares its financial statements and files its tax returns. A corporation (an incorporated business, or “company”) is not required to end its fiscal year on December 31: all its deadlines are based on its fiscal year-end date.

At a glance

A 12-month period at the end of which profit and taxes are calculated
A corporation (incorporated business) may end its fiscal year on a date other than December 31
This end date determines all your deadlines: corporate tax returns (T2 at the federal level, CO-17 in Quebec) and estimated tax payments
A self-employed person (someone who runs their own business) uses the calendar year, from January 1 to December 31
The tax return is filed within 6 months of the end of the fiscal year; an SME’s tax balance is due earlier, often within 3 months

Why it matters

Think of it as your business’s “New Year’s Day”: you choose it, usually when you incorporation. A business that’s swamped in December is better off ending its fiscal year in March rather than on December 31, so it can take inventory and prepare its financial statements without rushing. This date is set at the outset, as it determines all your tax deadlines: a company must file its T2 return (and CO-17 in Quebec) within 6 months after the end of the fiscal year, but pay the tax balance earlier, within 2 months (3 months for an eligible SME), and remit its tax instalments during the year. These official deadlines are set by the Canada Revenue Agency. If chosen poorly, the end date will leave you scrambling right in the middle of peak season. Bankeo connects you, for free, with a vetted accountant or CPA who will work with you to choose the best date, and we’ll be there for you every step of the way.

Frequently asked questions

What exactly is a fiscal year?

It’s the 12-month period your business uses to tally its sales, expenses, and profit, and then file its tax returns. It doesn’t necessarily run from January 1 to December 31.

Do I have to end my fiscal year on December 31?

A business may choose a different end date, such as March 31 or June 30. Self-employed individuals, on the other hand, follow the calendar year ending on December 31.

Can you change the end date to a later date?

Yes, but you’ll need approval from the tax authorities (the Canada Revenue Agency and Revenu Québec), and that complicates your tax returns. It’s better to make the right choice from the start. Bankeo will connect you with a vetted accountant or CPA for free to help with this, and we’ll be there for you every step of the way.