Bookkeeping

Fiscal year (financial year)

The twelve-month period for which a business prepares accounts and tax returns. Usually the calendar year, but many countries allow a different year end.

What Fiscal year (financial year) means

The fiscal or financial year is the accounting period that annual accounts and income tax returns cover. For most sole traders and many companies it coincides with the calendar year. Companies in several member states may choose a different year end, for example to match a seasonal business or a parent company abroad, subject to notifying the tax authority or the business register.

The first and last years of a business may be shorter or, where allowed, slightly longer than twelve months. Changing the year end is possible but restricted to prevent tax planning. VAT periods are independent of the fiscal year and follow monthly or quarterly cycles. Deadlines for filing accounts and tax returns are counted from the year end, so a non-calendar year shifts the whole compliance calendar. Kontevia lets the user set the year end and builds reports and reminders around it.

Related terms

Annual accounts (financial statements)The yearly balance sheet, profit and loss account and notes that companies must prepare, approve and file with a public register.Tax returnThe periodic declaration a business files with the tax authority to report its tax base and the tax due. VAT returns are monthly or quarterly; income tax returns are annual.Advance payment (tax prepayment)Instalments of income or corporate tax paid during the year based on the previous year's tax, settled against the final liability in the annual return.Accrual basis accountingRecording income and expenses in the period they belong to, regardless of when the cash moves. The standard method for companies across the EU.

This entry is general information, not tax advice. Rules change; check the current position with your adviser or the tax authority of your country.

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