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.
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.
[8] Most countries require all individuals to pay income tax based on the calendar year.
[7] 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] In Afghanistan, from 2011 to 2021, the fiscal year began on 1 Hamal (20th or 21 March).
[11] The fiscal year aligned with the Persian or Solar Hijri calendar used in Afghanistan at the time.
The fiscal cycle was restarted with effect from 1 Muharram 1444 AH (30 July 2022)[12] In Australia, a fiscal year is commonly called a "financial year" (FY) and starts on 1 July and ends on the next 30 June.
It is used for official purposes, by individual taxpayers and by the overwhelming majority of business enterprises.
[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.
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.
[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.
[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.
Until 2001, it was the year ending 5 April, as in the United Kingdom, but was changed with the introduction of the euro.
Generally, the government releases the annual federal budget in October, ahead of the fiscal year.
[44] 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.
[53] In Singapore, the fiscal year for the calculation of personal income taxes is 1 January to 31 December.
[54] The fiscal year for the Government of Singapore and many government-linked corporations is 1 April to 31 March.
However, new companies should consciously choose their financial year end to stretch as much as a duration of 12 months as possible.
Many older companies still use a tax year that runs from 1 July to 30 June, inherited from the British system.
[58] The fiscal year for an organisation is typically one of the following: However, all calendar months are allowed.
If an organisation wishes to change into a non-calendar year, permission from the Tax Authority is required.
[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.
(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.)
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.
Forty-six of the fifty states set their fiscal year to end on 30 June.
[71] Among the inhabited territories of the United States, most align with the federal fiscal year, ending on 30 September.