Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Would CRA accept a 2009 income tax return form for a fiscal period that started on December 29, 2008 and ended on January 3, 2010
Position: Yes.
Reasons: Subsection 249(3)
September 1st, 2011
Mr. William MacGregor Jelena Pajkovic
London TSO (613) 941-0782
451 Talbot Street, 6th floor
London ON N6A 5E5
2011-041036
Floating Fiscal Periods
This is in response to your e-mail of June 15, 2011 wherein you requested our comments regarding the determination of the taxation year-end of a corporation for a particular calendar year, in a situation where the corporation uses a floating fiscal period (established in accordance with the International Organization for Standardization (ISO) system).
The ISO calendar system uses a cycle of 7 weekdays, a week starts with Monday. One ISO calendar year has either 52 or 53 full weeks (364 or 371 days). For example, under the ISO calendar system, the 2010 fiscal period of a corporation having selected the week ending with the Sunday which is nearest in time to December 31 would start on December 29, 2008 and end on January 3, 2010. You are asking whether the corporation in this particular situation, should use the 2009 or 2010 version of the income tax return (T2 form) for the fiscal period in question.
Pursuant to subsection 249(3) of the Income Tax Act, where the fiscal period of a corporation exceeds 365 days and by reason thereof the corporation does not have a taxation year that ends in a particular calendar year, the corporation's first taxation year ending in the immediately following calendar year shall be deemed to end on the last day of the particular calendar year.
In the case at hand, the 2010 fiscal period of the corporation is 371 days long and the corporation has no taxation year-end in 2009, therefore the corporation's first taxation year ending immediately following 2009 (i.e. the taxation year ending on January 3, 2010) is deemed to end on December 31, 2009. Accordingly, the corporation would have to file a 2009 T2 form with respect to its January 3, 2010 taxation year deemed to end on December 31, 2009.
We trust the above comments will be of assistance.
Maurice Bisson, CGA
for Director
Corporate Reorganizations and
Resources Industry Section
Reorganizations and Resources Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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