Learn more about selecting your fiscal year-end when Incorporating.
The fiscal year-end is the annual date on which your corporation finishes a 12-month business cycle, reports its annual financial statements, and calculates its taxes.
1. Rules For Choosing a Date
When you incorporate on Goodlawyer, we allow you to choose the month of your fiscal year-end and automatically assign it to the last day of your chosen month.
2. Tips For Choosing a Date
Most entrepreneurs either choose the fiscal year-end to be the same as the calendar year-end (December 31), or choose the last day of the month on which the company was incorporated.
If you choose a month that’s different from your date of incorporation, you can end up having your first fiscal year be shorter than 12 months. For example, if you incorporate on July 1st of 2022 and select your fiscal year end to be December 31st of 2022, your first fiscal reporting period will only be from July 1st to December 31st of 2022.
Another consideration might be if your industry has a slower season, you might choose that for your fiscal year-end. That way you can focus on growing the business without distractions, and take care of the admin when things slow down.There may also be tax benefits to choosing a fiscal year-end within a certain time frame so you may want to talk to your accountant first.
3. Changing Your Fiscal Year-End
It is possible to change your fiscal year-end, but it requires approval from the Canada Revenue Agency. You must first write them a letter (sent to your nearest tax services office) explaining the reason for your request, which they will either approve or deny. There are a few circumstances in which approval is not required, but they all involve either the dissolution of your corporation, or a change in ownership like an acquisition or amalgamation.Generally, it’s best to be sure about your fiscal year-end when you first incorporate. To learn more about changing your date, visit the Canada Revenue Agency website.