A fiscal year is the 12 month period that an organization uses to report its annual revenues. Many registered charities have a fiscal year-end of December 31st. However, a fiscal year-end does not have to align with the calendar year. There are many reasons why you may want to change your fiscal year-end, such as lining up your year-end with associated industry partners to improve efficiencies. Regardless of the reasoning, you must follow the proper steps to request a new fiscal year-end.
Step 1: Send a letter to the Charities Directorate requesting approval to change the fiscal year-end
This letter must include your proposed new fiscal year-end date, the proposed effective year of change and the signature of a director/trustee or another authorized representative of the organization. You should also include the reasoning for requesting the change.
Step 2: File your transitional return
Once you have received confirmation back from the Canada Revenue Agency, you will need to file a return for the transition period. The annual information return (T3010) cannot be filed for a period of longer than 12 months. If your charity changes its fiscal year-end, a transitional return will need to be filed for the period between the old fiscal year-end and the new fiscal year-end.
Step 3: File your regular return with the new fiscal year-end
Once the transition period has ended, you can now file your return with the new fiscal year-end. Moving forward, you can continue to file your regular return with this new fiscal year-end date. Be sure to also amend your governing document if it includes a fiscal year-end.
Confused? Speak with one of our Not-for-Profit Team members about the process of changing your fiscal year-end date and if it is the best move for your organization! Call us today at 1-866-822-9992.
Reference: Asking for a fiscal year-end change
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- Charities and Not-for-Profits: How to change your fiscal year-end - March 12, 2019