Your previous fiscal period had fewer than 183 days
The fiscal period of a corporation may have fewer than 183 days. This may occur where, for example, two or more corporations have been amalgamated, a corporation is wound up, control of a corporation changes or a corporation is in its first fiscal period. If your corporation had a previous fiscal period having fewer than 183 days, you must recalculate the amounts of income tax and other taxes for that year to determine whether the corporation is required to pay instalments and to calculate the amount of the instalments.
You must annualize the amounts of income tax and other taxes (tax on capital, tax on capital of insurance corporations and life insurers, and compensation tax), that is, calculate these amounts in proportion to 365 days, using the following formula:
Amount of income tax and other taxes paid × 365
Actual number of days in the taxation year
Compare the results with the annualized amounts for the last taxation year having more than 182 days and that preceded the year having fewer than 183 days. Select the higher of the two amounts with respect to each of the taxes in question (income tax, tax on capital, tax on capital of insurance corporations and life insurers, and compensation tax).
Carry out this adjustment to determine whether your corporation is required to pay instalments, and to calculate the amount of the instalments.
For further information, refer to note 4 of form CO-1027, Calculation of Instalments for Corporations.
- Note
- Only the amounts for previous fiscal periods need be annualized and compared. Do not annualize the amounts for the current fiscal period.
Example
| Determination of amounts used in the calculation for a fiscal period having fewer than 183 days
|
|
|
Current fiscal period
|
Previous fiscal period
|
Second previous fiscal period
|
Last fiscal period that preceded the period and that had more than 182 days
|
| Fiscal period
|
From 2007-05-01 to 2008-04-30
|
From 2006-05-01 to 2007-04-30
|
From 2005-12-01 to 2006-04-30
|
From 2004-07-01 to 2005-06-30
|
| Duration
|
366 days
|
365 days
|
151 days
|
365 days
|
| Income tax
|
$2,400
|
$1,400
|
$500
|
$1,000
|
| Other taxes
|
$700
|
$700
|
$270
|
$700
|
| Amounts used in the calculation of instalments
|
| Income tax
|
$2,400
|
$1,400
|
$1,208.611
|
$1,000
|
| Tax on capital
|
$700
|
$1,400
|
$7002
|
$700
|
1. ($500 × 365 days) ÷ 151 days = $1,208.61
2. ($270 × 365 days) ÷ 151 days = $652.65