1 September 2011 Internal T.I. 2011-0410361I7 - Floating fiscal periods

By services, 17 December, 2016
Bundle date
Official title
Floating fiscal periods
Language
English
CRA tags
249(3); 249(1); 249.1(1)
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2011-0410361I7
Severed letter type
Technical Interpretation - Internal
Author
Jelena Pajkovic
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Node
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393197
Extra import data
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Main text

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