Short tax year

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Short tax year

Current year

Your tax year may be less than 12 months. If so, you have to pay one-twelfth or one-tenth of your tax each complete month in the tax year, depending on which calculation option you choose (see Calculating instalments of Parts I, VI, VI.1, and XIII.1 tax, and provincial and territorial tax for more information on the different options). If you are an eligible small CCPC, you have to pay one-quarter or one-third of your tax each complete quarter in the tax year.

You do not have to make an instalment payment for a tax year that is shorter than one month, or in the case of an eligible small CCPC, shorter than one quarter.

The tax you did not pay in instalments is due on your balance-due day.

Example

  • Start of tax year: January 15, 2016
  • End of tax year: August 31, 2016

Tax owed by instalments under option 2: $300,000.

Seven monthly instalments of $25,000 (1/12 of $300,000) each must be paid on February 14, March 14, April 14, May 14, June 14, July 14, and August 14.

If the actual tax for the year is $400,000, the remaining $225,000 is due by the balance-due day.

For an eligible small CCPC, two quarterly instalments of $75,000 (1/4 of $300,000) each must be paid on April 14 and July 14.

If the actual tax for the year is $400,000, the remaining $250,000 is due by the balance-due day.

Previous year

For option 2 or 3, when a previous tax year is less than 12 months, the tax payable for that year is adjusted to a 12-month equivalent [Regulation 5301(1)]. This is called the adjusted base.

To calculate the adjusted base, divide 365 by the number of days in the tax year. Multiply this figure by the actual tax payable for that year.

Note

365 is not adjusted for the leap year.

For option 2 or 3, when a previous tax year is less than 183 days, the adjusted base is whichever of the following amounts is greater:

  • the adjusted base for that tax year; or
  • the adjusted base for the next previous tax year of more than 182 days [Regulation 5301(3)].

Forms and publications

Date modified:
2015-12-15