| 19(1) | File No. 5-8235 |
| C. Tremblay | |
| (613) 957-2095 |
July 27 1989
Dear Sirs
Re: Financial Year and Taxation Year of a Corporation
This is in reply to your letter of June 12, 1989, concerning "fiscal periods" and "taxation years" of a corporation.
You describe a situation where a corporation has a fiscal period ending on June 30, which has been adopted by the taxpayer and has previously been accepted for purposes of assessment under the Income Tax Act (the "Act"). The corporation now proposes to change its year end to September 30, for financial reporting purposes only. The corporation will continue to file income tax returns and report its income for tax purposes on a June 30 year end basis.
Our Comments
Subsection 248(1) and 249(1) of the Act provide that a corporation's taxation year for purposes of assessment thereunder is the period accepted by the Minister for which the accounts of the business of the corporation have been ordinarily made up. There is no provision under the Act or under the Canada Corporations Act expressly prohibiting a corporation from having more than one financial year. Accordingly, in the year described, no change in "fiscal period" as defined in subsection 248(1) of the Act has occurred. Thus, there is no need for concurrence of the Minister with the accounting year end change.
Although there is no requirement for audited financial statements, subsection 230(1) of the act requires that the corporation maintain books and records in such form and containing such information as will enable the taxes payable or other amounts that should have been deducted, withheld or collected to be determined.
We trust our comments will be of assistance
Yours truly,
for DirectorSmall Business and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch