Change of fiscal period (year-end change)
A change of fiscal period is a change in the date a business’s tax year ends. Section 249.1(7) of the Income Tax Act says no change in when a fiscal period ends may be made for the purposes of the Act without the Minister’s concurrence. The CRA lists situations where approval is not needed.
A buyer meets this after closing, when it wants the target’s year-end to match its own. The CRA says that generally, unless approval to change the tax year-end has been received, a corporation’s fiscal period is the same from year to year. For a corporation, section 249.1(1) says no fiscal period may end more than 53 weeks after it began.
How a change is requested
The CRA says to write a letter to your tax services office asking for approval, explaining the reasons for the change and its effective date. It also lists situations where approval is not needed, including a dissolution with a final return, a year-end forced by emigration or a change in tax-exempt status, and an acquisition of control under subsection 249(4). A bankrupt corporation must get the CRA’s approval.
What to ask
- Whether the purchase itself ended the target’s tax year under the acquisition-of-control rule
- Whether a further change needs the CRA’s approval, and who will write the request
- How the new year-end affects T2 filing dates and any group schedules
See deemed year-end on acquisition of control and taking over a business after closing.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Government of CanadaGovernmentIncome Tax Act, R.S.C. 1985, c. 1 (5th Supp.)
- 02Canada Revenue AgencyGovernmentChange of fiscal year-end
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