At a Glance
The answer to this question is that it varies...
Whether you’re a medical doctor, lawyer, or a small business owner, the CRA’s fiscal year serves as an accounting cycle to file income tax returns.
In Canada, businesses are allowed to choose different year ends; the Canadian government’s year, for instance, runs from 1st April to 31st March.
Generally, sole proprietorships and partnerships can apply to the CRA to change their year ends if they wish to set them on a date other than 31st December, while corporations are allowed to freely choose their fiscal year ends.
Changing your year end if the current doesn’t work for you
Lawyers, doctors, and other business owners require approval from the CRA to alter their year ends if they don’t wish to run from 1st January to 31st December.
They need to fill Form T1139 of Reconciliation of Business Income for Tax Purposes. However, there are no guarantees when it comes to obtaining approval for changing your year end.
For example, if the CRA establishes that a doctor is trying to alter their year end for personal convenience, the application may be rejected.
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