| 19(1) | File No. 5-8120 |
| A.W. Larochelle | |
| (613) 957-2140 |
July 25, 1989
Dear Sirs:
Re: Subsection 248(1) Meaning Of Fiscal Period
This is in reply to your letter of may 15, 1989, and further to our telephone conversation of June 26, 1989 regarding your enquiry.
You are requesting clarification of the meaning of "53 weeks" referred to in the definition of "fiscal period" in subsection 248(1) of the Act. You have further presented for our comments the following hypothetical situation.
A corporation was incorporated on November 23, 1988 (a Wednesday) and wishes to establish a first fiscal period ending November 30, 19889 (a Thursday).
Based on this example you have asked if the fiscal period would exceed 53 weeks? You have also asked if the answer would be any different if the corporation was incorporated on November 22, 1989.
A corporation is required to file a T2 return for its first fiscal year for a period not in excess of 53 weeks (371 days) form the date it comes into existence (as specified by the appropriate corporations Act). This position is supported by the Tax Review Board decision of Motivair Ltd. v. MNR (66 DTC 77).
The case described in your example using either the November 22 or 23, 1988 date would exceed the maximum fiscal period permissible for purposes of the Income Tax Act.
Should you have a specific case in mind currently or in the future please direct you enquiry with full details to the District Office where you client will file its first T2 return.
We trust our comments will be of assistance.
Yours truly,
for DirectorSmall Business and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch