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.
XXXXXXXXXX
Dear Sir:
RE: Change of Fiscal Period
This is in reply to your letter of April 29, 1993 concerning the above- mentioned subject.
As noted in Information Circular 70-6R2, dated September 28, 1990, the Department does not express opinions on specific proposed transactions other than as a reply to an advance income tax request. As a consequence thereof, we may only offer the following general comments.
A self-employed individual may choose to report income for a fiscal period that does not coincide with the calendar year. Pursuant to the definition of "fiscal period" as found in subsection 248(1) of the Income Tax Act, the fiscal period may not exceed 12 months. Also, once a fiscal year-end has been established, it may not be changed without the prior approval of the Department. We enclose Interpretation Bulletin IT-179 and the Special Release thereto which contain information regarding the change of a fiscal year-end.
Where a self-employed individual (A) who is in association, which is not a partnership, with another self-employed individual (B), leaves his associate B and there is no disposition of A's business but a continuation of his business as a sole proprietor, his year-end would remain the same as it was prior to leaving his associate B and becoming a sole proprietor. To make a change in his usual and accepted fiscal period, A would have to obtain the approval of the Department.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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