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.
On Ownr, we allow you to choose your fiscal year-end when first setting up your company. This means that all of your company formation documents will properly reflect the date you choose for your fiscal year-end:
What Date is Most Common?
Most entrepreneurs choose one of two dates:
Last day of the month closest to the 53 week mark.
Some entrepreneurs prefer having their business tax year the same as the calendar year. In that instance, they will choose the last day of December.
Other entrepreneurs choose the last day of the month closest to the date of their incorporation. For example, if you incorporate on November 10, 2021, you would choose the last day of October to be your fiscal year-end (i.e. your first fiscal year-end would end October 31, 2022.). This allows you to postpone payment of professional fees related to filing your T2 corporate tax return and your corporate tax bill.
Otherwise, if the entrepreneur who incorporated on November 10, 2021 chooses the last day of December as their Fiscal Year-End, their first fiscal year would be November 10, 2021 - December 31, 2021.