Modifying the Length of Fiscal Months in a Quarter

GST/HST Policy Statement P-008

Date of Issue July 3, 1992

Subject Modifying the Length of Fiscal Months in a Quarter

Legislative Reference (s) Section 243 of the Excise Tax Act and an amendment thereto as a result of Bill C-112 as table in the House of Commons on February 11, 1993.

National Coding System File Number(s) NA

Effective Date December 17, 1990

As a result of Bill C-112 as tabled in the House of Commons February 11, 1993, registrants will be permitted to have one fiscal month longer than 35 days in a quarter on application to, and approval from, the Minister. As well, registrants will be permitted two fiscal months of less than 28 days in a quarter. If the two short months are other than the first and last month in a quarter, then the registrant must apply to the Minister for approval to use those months as shorter months.

The length of the fiscal quarter which contains the modified fiscal month must still be respected, i.e., no longer than 114 days (proposed amendments revise this figure to 119 days) for all quarters and no less than 84 days in the second and third quarters.

The registrant must make application to modify the length of a fiscal month indicating:

• the month(s) to be modified including the length and the start and end dates;
• all other fiscal months in the registrant's fiscal year including their lengths and start and end dates;
• the reasons for the request to modify the month(s).

The request will be granted or denied based on an assessment of the impact on net tax remittable and on input tax credits using the following criteria:

A. NATURE OF THE BUSINESS - There may be industry- specific requirements that dictate a longer or shorter month.

B. OUTSTANDING ASSESSMENTS - Registrants who have outstanding assessments may be considered to be unacceptable risks when assessing requests for greater filing flexibility. In particular, requests by such registrants for longer fiscal months which further delay the remittance of any net tax should be viewed with caution.

C. SPECIAL CIRCUMSTANCES - This category is necessarily diverse but would include situations such as a one-time start-up or change over situation.

D. SIGNIFICANT OR FUNDAMENTAL CHANGE IN THE NATURE OF THE BUSINESS - While reasons justifying a request to modify fiscal months may previously have been acceptable, a subsequent annual request may become unacceptable due to changes in the nature of the business of the registrant which affect criteria A. and B.

An application to modify the length of a fiscal month in a particular fiscal year must be filed in that year by the earlier of the day a person was required to file and application to be registered or the effective date of registration. In all other cases, an application to modify the length of a fiscal month must be filed before the first day of the fiscal year to which the application applies.

The Minister shall notify the registrant in writing as to the decision regarding the application. If the application has been approved, the Minister will confirm in writing the effective date and duration of the approval.

The approval shall remain in effect to the end of the registrant's fiscal year. For renewal purposes, another application must be made prior to the beginning of the next fiscal year.