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: Whether ease of financial reporting constitutes a sound business reason for changing the fiscal period end.
Position: Yes.
Reasons: Ease of financial reporting is in line with the reasons that have been accepted over the years.
March 12, 2010
East Central Ontario Tax Services HEADQUARTERS
Office/Peterborough Income Tax Rulings
Directorate
Attention: Stan Wadlow, Manager Lindsay Frank
Taxpayer Services and Debt Management (613) 948-2227
2009-031106
Change in Fiscal Period End
This is in reply to an email from Jean-Marie Hochu. At issue is whether ease of financial reporting could constitute a sound business reason to allow a change to a corporation's fiscal period end.
Subsection 249.1(1) of the Income Tax Act (the "Act") defines a fiscal period of a business or property of a person or partnership. It is the period for which the accounts of a person or partnership, in respect of the business, are made up for purposes of assessment under the Act. Subsection 249.1(1) also sets limits when a fiscal period may end. In the case of a corporation other than a professional corporation, paragraph 249.1(1)(a) states that a fiscal period may not end more than 53 weeks after the period began.
Subsection 249.1(7) provides that a corporation may not change its fiscal period end without the Minister's concurrence. In order for the Minister to concur with such a change, the corporation must provide sound business reasons, as indicated by Ms Hochu's reference to IT-179R (archived), paragraph 2. "Sound business reasons" for changing the fiscal period end could, for example, include ease of financial reporting.
In closing, please note, however, that where difficulty exists in deciding whether to grant a change to a fiscal period end, the Audit Division should be consulted. Meanwhile, should you need clarification or further information, please do not hesitate to contact Lindsay Frank at the number provided above.
B.J. Skulski
Manager
Insolvency and Administrative Law Section
Ontario Corporate Tax Division
c.c. Jean-Marie Hochu
Client Services Section
East Central Ontario Tax Services Office/Peterborough
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2010
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2010
Email this Content