Fiscal Year
Updated June 13, 2026
Definition
A fiscal year is a 12-month accounting period ending on the last day of any month other than December, used by corporations and other non-individual taxpayers for financial reporting and income tax. The alternative is the calendar year, January 1 to December 31.
In the Philippines, taxable income is computed on the taxpayer's annual accounting period, either a fiscal year or the calendar year. Individuals must use the calendar year, as must taxpayers that keep no books or have no annual accounting period (NIRC Sec. 43). Corporations and other non-individual taxpayers may adopt a fiscal year that fits their business cycle. A taxpayer other than an individual that wants to change its accounting period needs the Commissioner's approval and files a separate return for the short period created by the change (NIRC Sec. 46 and 47). The accounting period determines when annual and quarterly income tax returns are due.
Why it matters
Your accounting period sets the due dates of your quarterly and annual income tax returns. A corporation on a fiscal year files its annual return on or before the 15th day of the fourth month after its year ends, not on April 15. Missing these dates triggers a 25% surcharge and 12% annual interest on unpaid tax (10% and 6% for micro and small taxpayers).
How it works
Corporations and partnerships declare their accounting period when they register with the BIR on BIR Form 1903; individuals register on BIR Form 1901 and are on the calendar year. A non-individual taxpayer that later wants to switch from calendar to fiscal year, or from one fiscal year to another, needs the Commissioner's approval, and the change is recorded through a registration update (BIR Form 1905). The switch creates a short period, for which a separate return is filed (NIRC Sec. 46 and 47). Corporate quarterly returns are due within 60 days after each of the first three quarters of the fiscal year, and the annual return on the 15th day of the fourth month after the year ends (NIRC Sec. 77(B)). Withholding tax returns follow calendar months and quarters whatever the income tax year.
Examples
Standard Calendar Year Taxpayer
Juan operates a sari-sari store as a sole proprietor, so he must use the calendar year (January 1 to December 31, 2026). His annual ITR must be filed by April 15, 2027, covering all income earned from January 1, 2026, to December 31, 2026.
Retail Business Fiscal Year
ABC Retail Corp. uses a fiscal year ending March 31 to align with its business cycle. Its fiscal year running from April 1, 2025, to March 31, 2026 must be covered by an annual ITR filed by July 15, 2026, the 15th day of the fourth month after year-end.
Agricultural Business Example
Verde Farms Inc. uses a fiscal year ending September 30 to match its harvest cycle. For the fiscal year from October 1, 2025, to September 30, 2026, it must file its corporate income tax return by January 15, 2027.
School Fiscal Year
Bright Academy Inc. uses a fiscal year ending May 31 to align with the academic year. Its fiscal year covering June 1, 2025, to May 31, 2026 has an annual ITR due by September 15, 2026.
Mid-Year Business Start
New Corp. was incorporated on July 15, 2025, and chooses a calendar year. Its first tax period is a short period from July 15 to December 31, 2025, with the return due by April 15, 2026.
Common misconceptions
- Myth: All businesses must use calendar year
- Fact: Corporations and other non-individual taxpayers may adopt a fiscal year. Individuals, including sole proprietors, must use the calendar year (NIRC Sec. 43).
- Myth: Fiscal year can be changed anytime
- Fact: A change of accounting period needs the Commissioner's approval and a separate return for the short period (NIRC Sec. 46 and 47).
- Myth: Fiscal year affects tax rates
- Fact: The same rates apply whether the year ends in December or another month. What changes is the period covered and the filing deadlines.
Questions people ask
What is a fiscal year in Philippine taxation?
A fiscal year is an accounting period of 12 months ending on the last day of any month other than December (NIRC Sec. 22). The calendar year always runs January 1 to December 31.
What does fiscal year mean for my business tax filing?
A corporation on a fiscal year files its annual income tax return on or before the 15th day of the fourth month after its fiscal year ends, and its quarterly returns within 60 days after each of the first three quarters of that fiscal year (NIRC Sec. 77(B)). Individuals use the calendar year and file by April 15.
How do I define fiscal year vs calendar year in the Philippines?
The calendar year runs January 1 to December 31, while a fiscal year is any 12-month period ending on the last day of another month. Individuals must use the calendar year; corporations and other non-individual taxpayers may use either.
Who needs to understand fiscal year concepts?
Corporations and partnerships choosing an accounting period, accountants preparing financial statements and returns, and anyone tracking the filing deadlines of a business that does not close its books in December.
When will I encounter fiscal year on BIR forms?
Fiscal year appears on corporate income tax returns (BIR Forms 1702Q, 1702-RT, 1702-MX and 1702-EX), on the registration form for corporations (BIR Form 1903) and on registration updates (BIR Form 1905). Individual returns such as Forms 1700, 1701 and 1701Q are on the calendar year.
How is fiscal year determined for new businesses?
A new corporation or partnership states its accounting period when it registers with the BIR on Form 1903. It must keep using that period unless the Commissioner approves a change (NIRC Sec. 46).
Can I change my fiscal year end date?
A corporation or other non-individual taxpayer can, with the Commissioner's approval. It files a separate return for the short period between the old and new year-ends (NIRC Sec. 46 and 47). Individuals cannot switch from the calendar year.
What are common fiscal year mistakes in Philippine tax filing?
Common mistakes include filing the annual return of a fiscal-year corporation on April 15 instead of the 15th day of the fourth month after its year-end, counting quarterly deadlines from calendar quarters instead of fiscal quarters, and changing the accounting period without the Commissioner's approval.
Next steps
Learn more
Annual Income Tax Calculator
Corporate Income Tax Calculator
Quarterly Income Tax Calculator
BIR Form 1702 RT Annual Corporate Income Tax Return
BIR Form 1903 Application For Registration
BIR Form 1905 Registration Information Update
BIR Form 1702Q Quarterly Corporate Income Tax Return
Corporate Tax Filing Deadlines Guide
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Taxpayer guides
BIR forms
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Glossary
Sources & References (1)
Primary sources and the laws, regulations, and official issuances this page relies on. Links open the recorded source documents or references.
- LawPhil Project (Arellano Law Foundation). “NIRC §22(Q), §43-47 (fiscal/taxable year, accounting periods): full text.” lawphil.net. NIRC of 1997 (RA 8424), Sec. 22(Q)/43-47. Source checked .