A fiscal year (also known as a financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many jurisdictions require company financial reports to be prepared and published on an annual basis but generally with the reporting period not aligning with the calendar year (1 January to 31 December). Taxation laws generally require accounting records to be maintained and taxes calculated on an annual basis, which usually corresponds to the fiscal year used for government purposes. The calculation of tax on an annual basis is especially relevant for direct taxes, such as income tax. Many annual government fees—such as council tax and license fees, are also levied on a fiscal year basis, but others are charged on an anniversary basis.
Some companies, such as Cisco Systems,[1] end their fiscal year on the same day of the week each year: the day that is closest to a particular date (for example, the Friday closest to 31 December). Under such a system, some fiscal years have 52 weeks and others 53 weeks.[2]
The calendar year is used as the fiscal year by about 65% of publicly traded companies in the United States and for most large corporations in the United Kingdom.[3] That is the case in many countries around the world with a few exceptions such as Australia, New Zealand, and Japan.[4]
Many universities have a fiscal year which ends during the summer to align the fiscal year with the academic year (and, in some cases involving public universities, with the state government's fiscal year) and also because the university is normally less busy during the summer months. In the Northern Hemisphere, that is July to the next June. In the Southern Hemisphere, that is the calendar year, January to December. In a similar fashion, many nonprofit performing arts organizations will have a fiscal year which ends during the summer, so that their performance season that begins in the fall and ends in the spring will be within one fiscal year.
Some media/communication-based organizations use a broadcast calendar as the basis for their fiscal year.
Fiscal years' names are often shortened based on the year in which they end; for example, "fiscal year 2023-2024" and "FY24" are synonymous.
The fiscal year for individuals and entities to report and pay income taxes is often known as the taxpayer's tax year or taxable year. Taxpayers in many jurisdictions may choose their tax year.[6] Some federal countries, such as Canada and Switzerland, require the provincial or cantonal tax year to align with the federal year. In the United States, most states retained a 30 June fiscal year-end date when the federal government switched to 30 September in 1976. Nearly all jurisdictions require that the tax year be 12 months or 52/53 weeks.[7] However, short years are permitted as the first year or when changing tax years.[8]
Most countries require all individuals to pay income tax based on the calendar year. Significant exceptions include:
Australia: individuals pay income tax based on the financial year of 1 July until 30 June.[9]
United States: individuals may (but rarely do) elect any tax year, subject to IRS approval.[10]
Many jurisdictions require that the tax year conform to the taxpayer's fiscal year for financial reporting. The United States is a notable exception: taxpayers may choose any tax year, but must keep books and records for such year.[7]
Operation by jurisdiction
In some jurisdictions, particularly those that permit tax consolidation, companies that are part of a group of businesses must use nearly the same fiscal year (differences of up to three months are permitted in some jurisdictions, such as the US and Japan), with consolidating entries to adjust for transactions between units with different fiscal years, so the same resources will not be counted more than once or not at all.[citation needed]
Afghanistan
In Afghanistan, from 2011 to 2021, the fiscal year began on 1Hamal (20th or 21 March).[11] The fiscal year aligned with the Persian or Solar Hijri calendar used in Afghanistan at the time.
Following transfer of power to the Taliban administration in September 2021, Afghanistan abandoned the Solar Hijri calendar in favour of the Lunar Hijri calendar. The fiscal cycle was restarted with effect from 1Muharram 1444 AH (30July 2022)[12]
Australia
In Australia, a fiscal year is commonly called a "financial year" (FY) and starts on 1 July and ends on the next 30 June. Financial years are designated by the calendar year of the second half of the period. For example, financial year 2025 is the 12-month period ending on 30 June 2025 and can be referred to as FY2024/25. It is used for official purposes, by individual taxpayers and by the overwhelming majority of business enterprises.[9] Business enterprises may opt to use a financial year that ends at the end of a week (e.g., 52 or 53 weeks in length, and therefore is not exactly one calendar year in length), or opt for its financial year to end on a date that matches the reporting cycle of its foreign parent. All entities within the one group must use the same financial year.
For government accounting and budget purposes, pre-Federation colonies changed the financial year from the calendar year to a year ending 30 June on the following dates: Victoria changed in 1870, South Australia in 1874, Queensland in 1875, Western Australia in 1892, New South Wales in 1895 and Tasmania in 1904. The Commonwealth adopted the near-ubiquitous financial year standard since its inception in 1901.[13] The reason given for the change was for convenience, as Parliament typically sits during May and June, while it was difficult for it to meet in November and December to pass a budget.[13]
The Financial year is split into four quarters which cover the following periods:[14]
Quarter
Period covered
Quarter 1
1 Jul– 30 Sep
Quarter 2
1 Oct– 31 Dec
Quarter 3
1 Jan– 31 Mar
Quarter 4
1 Apr– 30 Jun
Austria
In Austria, the fiscal year is the calendar year, 1 January to 31 December.
Bangladesh
In Bangladesh, the fiscal year is 1 July to the next 30 June.[15]
Belarus
In Belarus, the fiscal year is the calendar year, 1 January to 31 December.[16]
Brazil
In Brazil, the fiscal year is the calendar year, 1 January to 31 December.
Bulgaria
In Bulgaria, the fiscal year is the calendar year, 1 January to 31 December, both for personal income tax[17] and for corporate taxes.[18]
Canada
In Canada, the government's financial year is 1 April to 31 March.[19] (Q1 1 April– 30 June, Q2 1 July– 30 Sept, Q3 1 Oct– 31 Dec and Q4 1 Jan– 31 Mar)
For individual taxpayers, the fiscal year is the calendar year, 1 January to 31 December.
China
In China, the fiscal year for all entities is the calendar year, 1 January to 31 December, and applies to the tax year, statutory year, and planning year.[20]
Colombia
In Colombia, the fiscal year is the calendar year, 1 January to 31 December.
Costa Rica
In Costa Rica, the fiscal year is the calendar year. January to December. As of 2019 when the tax laws changed. [21]
Egypt
In Egypt, the fiscal year is 1 July to 30 June.[22]
France
In France, the fiscal year is the calendar year, 1 January to 31 December, and has been since at least 1911.[23]
Germany
In Germany, the fiscal year runs from 1 January until 31 December.
Greece
In Greece, the fiscal year is the calendar year, 1 January to 31 December.
Hong Kong
In Hong Kong, the government's financial year runs from 1 April to 31 March.[24]
However, a company incorporated in Hong Kong can determine its own financial year-end, which may be different from the government fiscal year.
India
In India, the government's financial year runs from 1 April to 31 March the following year.[25] The financial year from 1 April 2024 to 31 March 2025 would generally be abbreviated as FY 2024-25 or( FY24-25) ( FY2024/25),(FY2024/2025),(FY24/25), but it may also be called FY 2025 or FY25 on the basis of the ending year.[26]
Companies following the Indian Depositary Receipt (IDR) are given freedom to choose their financial year. For example, Standard Chartered's IDR follows the UK calendar despite being listed in India. Companies following Indian fiscal year get to know their economic health on 31 March of every Indian financial or fiscal year.
The current fiscal year was adopted by the colonial British government in 1867 to align India's financial year with that of the British Empire.[27][28] Prior to 1867, India followed a fiscal year that ran from 1 May to 30 April.[29]
On 4 May 2017, Madhya Pradesh announced that it would move to a January–December financial year, becoming the first Indian state to do so. But later it dropped the idea due to Many financial & accounting error.[30]
Indonesia
In Indonesia, since 2001, the fiscal year is the calendar year, 1 January to 31 December. Until 2000, the fiscal year ran from 1 April to 31 March; fiscal year 2000 ran from 1 April to 31 December.[31]
In Ireland, the fiscal year is the calendar year, 1 January to 31 December. Until 2001, it was the year ending 5 April, as in the United Kingdom, but was changed with the introduction of the euro. The 2001 tax year was nine months, from April to December.[33]
Israel
In Israel, the fiscal year is the calendar year, 1 January to 31 December.[34]
Italy
In Italy, the fiscal year is the calendar year, 1 January to 31 December. It was changed in 1965, before which it was 1 July to 30 June.[35]
Japan
In Japan, the government's financial year is from 1 April to 31 March.[36]
Japan's income tax year is 1 January to 31 December,[37] but corporate tax is charged according to the corporation's own annual period;[38] most Japanese corporations elect their annual period to follow the government fiscal year (1 April to 31 March).
Lithuania
In Lithuania, the fiscal year is the calendar year, 1 January to 31 December.[39]
Macau
In Macau, the government's financial year is 1 January to 31 December.
Malaysia
In Malaysia, the tax year for individuals is the calendar year, from 1 January to 31 December.[40]
The Companies Act 2016 does not state when the fiscal year must start for companies, so businesses are free to choose a financial year-end date.[41] Private businesses usually choose the last day of the calendar year or the last day of the quarter for their financial year end.
Generally, the government releases the annual federal budget in October, ahead of the fiscal year.
Mexico
In Mexico, the fiscal year is the calendar year, 1 January to 31 December.
Moldova
In Moldova, the fiscal year is the calendar year, 1 January to 31 December.[42]
Myanmar/Burma
In Myanmar, the fiscal year is 1 April to 31 March.[43]
Nepal
In Nepal, the fiscal year is 16 July (29 Dilā in Nepal Sambat) to 15 July (28 Dilā in Nepal Sambat).[44]
New Zealand
In New Zealand, the government's fiscal[45] and financial reporting[46] year is 1 July to the next 30 June[47] and applies also to the budget. The company and personal financial year[48] is 1 April to 31 March and applies to company and personal income tax.
Pakistan
In Pakistan, the government's fiscal year is 1 July of the previous calendar year and concludes on 30 June. Private companies are free to observe their own accounting year, which may not be the same as government's fiscal year.[49]
Philippines
In the Philippines, the government's fiscal year is the calendar year, from 1 January to 31 December.[50]
The accounting period for the private sector must follow a 12-month fiscal period which can or can not be synchronized with the calendar year. Most Philippine companies end their fiscal years in December or March.[51]
Poland
In Poland, the fiscal year is the calendar year, from 1 January to 31 December.
Portugal
In Portugal, the fiscal year is the calendar year, 1 January to 31 December.
Qatar
In Qatar, the fiscal year is from 1 January to 31 December.
Romania
In Romania, the fiscal year is the calendar year, 1 January to 31 December.[52]
Corporations and organisations are permitted to select any date as the end of each fiscal year, as long as this date remains constant. However, new companies should consciously choose their financial year end to stretch as much as a duration of 12 months as possible.[55]
The year of assessment for individuals covers twelve months, 1 March to the final day of February the following year. The Act also provides for certain classes of taxpayers to have a year of assessment ending on a day other than the last day of February. Companies are permitted to have a tax year ending on a date that coincides with their financial year. Many older companies still use a tax year that runs from 1 July to 30 June, inherited from the British system. A common practice for newer companies is to run their tax year from 1 March to the final day of February following, to synchronize with the tax year for individuals.[citation needed]
South Korea
In South Korea, the fiscal year is the calendar year, 1 January to 31 December.[56]
Spain
In Spain, the fiscal year is the calendar year, 1 January to 31 December.[57]
Sweden
In Sweden, the fiscal year for individuals is the calendar year, 1 January to 31 December.[58]
The fiscal year for an organisation is typically one of the following:
1 January to 31 December
1 May to 30 April
1 July to 30 June
1 September to 31 August
However, all calendar months are allowed. If an organisation wishes to change into a non-calendar year, permission from the Tax Authority is required.[59][60]
Switzerland
In Switzerland, the fiscal year is the calendar year, 1 January to 31 December.[61]
Taiwan
In Taiwan, the fiscal year is the calendar year, 1 January to 31 December. However, an enterprise may elect to adopt a special fiscal year at the time it is established and can request approval from the tax authorities to change its fiscal year.[62]
Thailand
In Thailand, the government's fiscal year (FY) is 1 October to 30 September of the following year.[63] For individual taxpayers it is the calendar year, 1 January to 31 December.
Turkey
In Turkey, the fiscal year is the calendar year, 1 January to 31 December.[64]
Ukraine
In Ukraine, the fiscal year is the calendar year, 1 January to 31 December.[65]
United Arab Emirates
In the United Arab Emirates, the fiscal year is the calendar year, 1 January to 31 December.[4]
United Kingdom
In the United Kingdom, the financial year runs from 1 April to 31 March for the purposes of government financial statements.[5] For personal tax purposes the fiscal year starts on 6 April and ends on 5 April of the next calendar year.[66]
Although United Kingdom corporation tax is charged by reference to the government's financial year, companies can adopt any year as their accounting year: if there is a change in tax rate, the taxable profit is apportioned to financial years on a time basis.[67]
A number of major corporations that were once government-owned, such as BT Group and the National Grid, continue to use the government's financial year, which ends on the last day of March, as they have found no reason to change since privatisation.[citation needed]
The 5 April year end for income tax reflects the old civil and ecclesiastical calendar under which New Year began on 25 March (Lady Day). The difference between the two dates is accounted for by the eleven days omitted in September 1752 due to the Calendar (New Style) Act 1750 by which Great Britain also converted from the Julian Calendar to the Gregorian Calendar. However, although the calendar year finished on 24 March, the tax year finished a day later, on 25 March, the Quarter Day–the traditional day on which debts were settled. (For a fuller explanation about the history of the United Kingdom income tax year and its start date, see History of taxation in the United Kingdom#Start of tax year.)
United States
Federal government
In the United States, the federal government's fiscal year is the 12-month period beginning 1 October and ending 30 September the following year. The identification of a fiscal year is the calendar year in which it ends; the current fiscal year is often written as "FY25" or "FY2024-25", which began on 1 October and will end on 30 September.
In 1843, the federal government changed the fiscal year from a calendar year to one starting on 1 July,[68] which lasted until 1976. The Congressional Budget and Impoundment Control Act of 1974 created the current fiscal year of 1 October to 30 September, making the change to allow Congress more time to arrive at a budget and creating what is known as the "transitional quarter" from 1 July 1976 to 30 September 1976.
State governments set their own fiscal year. Forty-six of the fifty states set their fiscal year to end on 30 June.[69] Four states have fiscal years that end on a different date:
In Vietnam, the fiscal year is the calendar year, 1 January to 31 December.
Businesses and organizations
The tax year for a business is governed by the fiscal year it chooses. A business may choose any consistent fiscal year that it wants; however, for seasonal businesses such as farming and retail, a good accounting practice is to end the fiscal year shortly after the highest revenue time of year. Consequently, most large agriculture companies end their fiscal years after the harvest season, and most retailers end their fiscal years shortly after the Christmas shopping season. Drake notes, however, that there are cases where businesses choose a year-end which fits with the slower part of their business year. At this point in the year they are likely to hold less inventory than their average daily inventory over the whole year.[72]
The economy of the British Virgin Islands is one of the most prosperous in the Caribbean. Although tiny in absolute terms, because of the very small population of the British Virgin Islands, in 2010 the Territory had the 19th highest GDP per capita in the world according to the CIA World factbook. In global terms the size of the Territory's GDP measured in terms of purchasing power is ranked as 215th out of a total of 229 countries. The economy of the Territory is based upon the "twin pillars" of financial services, which generates approximately 60% of government revenues, and tourism, which generates nearly all of the rest.
Denmark is a modern high-income and highly developed mixed economy, dominated by the service sector with 80% of all jobs; about 11% of employees work in manufacturing and 2% in agriculture. The nominal Gross National Income per capita was the ninth-highest in the world at $68,827 in 2023.
The economy of Hungary is a developing, high-income mixed economy that is the 53rd-largest economy in the world with $265.037 billion annual output, and ranks 41st in the world in terms of GDP per capita measured by purchasing power parity. Hungary has a very high human development index and a skilled labour force, with the 22nd lowest income inequality by Gini index in the world. Hungary has an export-oriented market economy with a heavy emphasis on foreign trade; thus the country is the 35th largest export economy in the world. The country had more than $100 billion of exports in 2015, with a high trade surplus of $9.003 billion, of which 79% went to the European Union (EU) and 21% was extra-EU trade. Hungary's productive capacity is more than 80% privately owned, with 39.1% overall taxation, which funds the country's welfare economy. On the expenditure side, household consumption is the main component of GDP and accounts for 50% of its total, followed by gross fixed capital formation with 22% and government expenditure with 20%.
Americans for Tax Reform (ATR) is a politically conservative U.S. advocacy group whose stated goal is "a system in which taxes are simpler, flatter, more visible, and lower than they are today." According to ATR, "The government's power to control one's life derives from its power to tax. We believe that power should be minimized." The organization is known for its "Taxpayer Protection Pledge", which asks candidates for federal and state office to commit themselves in writing to oppose all tax increases. The founder and president of ATR is Grover Norquist, a conservative tax activist.
The national debt of the United States is the total national debt owed by the federal government of the United States to Treasury security holders. The national debt at any point in time is the face value of the then-outstanding Treasury securities that have been issued by the Treasury and other federal agencies. The terms "national deficit" and "national surplus" usually refer to the federal government budget balance from year to year, not the cumulative amount of debt. In a deficit year the national debt increases as the government needs to borrow funds to finance the deficit, while in a surplus year the debt decreases as more money is received than spent, enabling the government to reduce the debt by buying back some Treasury securities. In general, government debt increases as a result of government spending and decreases from tax or other receipts, both of which fluctuate during the course of a fiscal year. There are two components of gross national debt:
A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property.
The Canada Revenue Agency is the revenue service of the Canadian federal government, and most provincial and territorial governments. The CRA collects taxes, administers tax law and policy, and delivers benefit programs and tax credits. Legislation administered by the CRA includes the Income Tax Act, parts of the Excise Tax Act, and parts of laws relating to the Canada Pension Plan, employment insurance (EI), tariffs and duties. The agency also oversees the registration of charities in Canada, and enforces much of the country's tax laws.
The Australian Taxation Office (ATO) is an Australian statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system, superannuation legislation, and other associated matters. Responsibility for the operations of the ATO are within the portfolio of the Treasurer of Australia and the Treasury.
Taxes in New Zealand are collected at a national level by the Inland Revenue Department (IRD) on behalf of the New Zealand Government. National taxes are levied on personal and business income, and on the supply of goods and services. Capital gains tax applies in limited situations, such as the sale of some rental properties within 10 years of purchase. Some "gains" such as profits on the sale of patent rights are deemed to be income – income tax does apply to property transactions in certain circumstances, particularly speculation. There are currently no land taxes, but local property taxes (rates) are managed and collected by local authorities. Some goods and services carry a specific tax, referred to as an excise or a duty, such as alcohol excise or gaming duty. These are collected by a range of government agencies such as the New Zealand Customs Service. There is no social security (payroll) tax.
Tax amnesty allows taxpayers to voluntarily disclose and pay tax owing in exchange for avoiding tax evasion penalties. It is a limited-time opportunity for a specified group of taxpayers to pay a defined amount, in exchange for forgiveness of a tax liability relating to previous tax periods. It typically expires when some authority begins a tax investigation of the past-due tax.
The United States budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies. The government primarily spends on healthcare, retirement, and defense programs. The non-partisan Congressional Budget Office provides extensive analysis of the budget and its economic effects. CBO estimated in February 2024 that Federal debt held by the public is projected to rise from 99 percent of GDP in 2024 to 116 percent in 2034 and would continue to grow if current laws generally remained unchanged. Over that period, the growth of interest costs and mandatory spending outpaces the growth of revenues and the economy, driving up debt. Those factors persist beyond 2034, pushing federal debt higher still, to 172 percent of GDP in 2054.
Income taxes in Canada constitute the majority of the annual revenues of the Government of Canada, and of the governments of the Provinces of Canada. In the fiscal year ending March 31, 2018, the federal government collected just over three times more revenue from personal income taxes than it did from corporate income taxes.
The tax system of the Russian Federation is a complex of relationships between fiscal authorities and taxpayers in the field of all existing taxes and fees. It implies continuous communication of all its members and related objects: payers; legislative framework; oversight authorities; types of mandatory payments. The Russian Tax Code is the primary tax law for the Russian Federation. The Code was created, adopted and implemented in three stages.
Income tax in India is governed by Entry 82 of the Union List of the Seventh Schedule to the Constitution of India, empowering the central government to tax non-agricultural income; agricultural income is defined in Section 10(1) of the Income-tax Act, 1961. Income-tax law consists of the 1961 act, Income Tax Rules 1962, Notifications and Circulars issued by the Central Board of Direct Taxes (CBDT), annual Finance Acts, and judicial pronouncements by the Supreme and high courts.
The United States Internal Revenue Service (IRS) uses forms for taxpayers and tax-exempt organizations to report financial information, such as to report income, calculate taxes to be paid to the federal government, and disclose other information as required by the Internal Revenue Code (IRC). There are over 800 various forms and schedules. Other tax forms in the United States are filed with state and local governments.
The economic policy of the Barack Obama administration, or in its colloquial portmanteau form "Obamanomics", was characterized by moderate tax increases on higher income Americans designed to fund health care reform, reduce the federal budget deficit, and decrease income inequality. President Obama's first term (2009–2013) included measures designed to address the Great Recession and subprime mortgage crisis, which began in 2007. These included a major stimulus package, banking regulation, and comprehensive healthcare reform. As the economy improved and job creation continued during his second term (2013–2017), the Bush tax cuts were allowed to expire for the highest income taxpayers and a spending sequester (cap) was implemented, to further reduce the deficit back to typical historical levels. The number of persons without health insurance was reduced by 20 million, reaching a record low level as a percent of the population. By the end of his second term, the number of persons with jobs, real median household income, stock market, and real household net worth were all at record levels, while the unemployment rate was well below historical average.
Taxes in Germany are levied at various government levels: the federal government, the 16 states (Länder), and numerous municipalities (Städte/Gemeinden). The structured tax system has evolved significantly, since the reunification of Germany in 1990 and the integration within the European Union, which has influenced tax policies. Today, income tax and Value-Added Tax (VAT) are the primary sources of tax revenue. These taxes reflect Germany's commitment to a balanced approach between direct and indirect taxation, essential for funding extensive social welfare programs and public infrastructure. The modern German tax system accentuate on fairness and efficiency, adapting to global economic trends and domestic fiscal needs.
Taxation may involve payments to a minimum of two different levels of government: central government through SARS or to local government. Prior to 2001 the South African tax system was "source-based", where in income is taxed in the country where it originates. Since January 2001, the tax system was changed to "residence-based" wherein taxpayers residing in South Africa are taxed on their income irrespective of its source. Non residents are only subject to domestic taxes.
The United States fiscal cliff refers to the combined effect of several previously-enacted laws that came into effect simultaneously in January 2013, increasing taxes and decreasing spending.
The economic policy of the first Donald Trump administration was characterized by the individual and corporate tax cuts, attempts to repeal the Affordable Care Act ("Obamacare"), trade protectionism, deregulation focused on the energy and financial sectors, and responses to the COVID-19 pandemic.
1 2 "Interpretation Act 1978: Schedule 1". legislation.gov.uk. The National Archives. 1978 c. 30 (sch.1). Retrieved 16 February 2024. "Financial year" means, in relation to matters relating to the Consolidated Fund, the National Loans Fund, or moneys provided by Parliament, or to the Exchequer or to central taxes or finance, the twelve months ending with 31st March. [1889]
↑ Soelistianingsih, Lana (9 July 2015). "Ini Keuntungan Pemerintah Merombak Tahun Fiskal"[Benefits of the government reorganization of the fiscal year]. Inilah.com (in Indonesian). Retrieved 10 December 2017.
↑ "The budget process". New York State Division of the Budget. Retrieved 8 February 2024.
↑ Council of the District of Columbia. Code of the District of Columbia (Title 1. Government Organization). §1–204.41. Fiscal year. Retrieved 19 June 2018.
↑ Drake, P. P., Financial ratio analysis, p. 4, published on 15 December 2012
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