The taxation year of an individual normally corresponds to the calendar year, that is, it begins on January 1 and ends on December 31.

A fiscal period corresponds to a period of no more than twelve months, at the end of which a business closes its books and prepares its financial statements. As a rule, the fiscal period ends on December 31.

Self-employed persons

If you are a self-employed person, you may elect to have your fiscal period end on a date other than December 31, even for your first year of business operations. If you elect to have a fiscal period end on a date other than December 31 for federal income tax purposes, you must use this same date for Québec income tax purposes. You must also add to your income the estimated income for the period between the end date of the fiscal period and January 1 of the following year, in order to more accurately account for your income for the year.

To make the election (and to calculate your estimated additional income), complete form TP-80.1-V, Calculation of Business or Professional Income, Adjusted to December 31, and file it together with your income tax return.

Partnerships

A newly formed partnership whose members are all individuals may select a date other than December 31 as the end date of its fiscal period, provided one of the partners designated by the partnership makes an election for that purpose. If so, the end date chosen must be the same as that chosen for federal purposes.

If the fiscal period ends on a date other than December 31, the taxpayer (or partner in a partnership) must complete form TP-80.1-V, Calculation of Business or Professional Income, Adjusted to December 31, and calculate his or her own estimated additional income for the year.