How to Choose a Fiscal Year-End for My Business?

Choosing a fiscal year-end is one of the first questions entrepreneurs are asked when incorporating their business. But what date should you choose for your business?

What is a fiscal year-end?

Your business’s fiscal year-end is also known as the tax year-end or financial year of your business.

The fiscal year-end is generally a twelve month period, however, this period may be shorter for businesses in their first year.

How do I choose my fiscal year-end?

The fiscal year-end for your business can be any date within 53 weeks from your incorporation date. The fiscal year-end will be officially set once you file your first T2 corporate tax return. The T2 tax return must be filed within 3 months after your business’s fiscal year-end date to avoid interest.

Although your fiscal year-end is officially set when you file your first tax return, it is best practice to set your fiscal year-end when you initially incorporate your business. This is because the initial directors’ resolution will specifically reference the business’s fiscal year-end.