Fiscal year
What a fiscal year is and how it works for a Philippine business, including taxable year rules and BIR deadlines.
Published Monday 31 August 2026
Table of contents
Key takeaways
- A fiscal year is a 12-month accounting period a business uses for financial reporting and tax.
- In the Philippines, individuals must use the calendar year, and only corporations may choose a fiscal year.
- A corporation’s annual income tax return is due on or before the 15th day of the 4th month after its taxable year ends.
- The national government and most Philippine businesses use the calendar year.
What is a fiscal year?
A fiscal year is a 12-month accounting period a business or organisation uses to track income, expenses, profit and overall financial performance. Under the Philippine Tax Code, it is a period of 12 months ending on the last day of any month other than December.
A fiscal year sets the start and end points for your books, so every transaction falls into one clear reporting window.
Fiscal year vs calendar year vs taxable year
These three terms are related but not the same, and the difference affects when you close your books and file your taxes. The National Internal Revenue Code (NIRC) uses ‘taxable year’ as an umbrella term that covers both the calendar year and the fiscal year.
- Calendar year: the 12-month period from 1 January to 31 December
- Fiscal year: any 12-month period ending on the last day of a month other than December
- Taxable year: the calendar year, or the fiscal year ending during that calendar year, as defined in the Tax Code
Put simply, the accounting period your business reports against is the window these terms describe, and choosing it correctly keeps your filings on track.
Who can use a fiscal year in the Philippines?
Not every taxpayer gets to choose. Under the Tax Code, individuals must report on the calendar year, and only corporations and partnerships may adopt a fiscal year (Tax Code, Section 43).
This means sole proprietors, freelancers and professionals report on the calendar year ending 31 December. Corporations and partnerships can instead pick a fiscal year that ends on the last day of another month, as set out in the rules on accounting periods and corporate tax administration under the NIRC.
When does the fiscal year start and end in the Philippines?
The national government runs on the calendar year, from 1 January to 31 December. A corporation, on the other hand, can end its fiscal year on the last day of any month other than December.
Before you report against any period, you need to be registered. Corporations register with the Securities and Exchange Commission (SEC), then register for tax with the Bureau of Internal Revenue (BIR). Keeping clean records from day one makes your first year-end far smoother, and a steady routine for small business bookkeeping helps you stay ready.
Why your fiscal year matters
Your fiscal year is the backbone of how you report, budget and stay compliant. It also shapes how clearly you can read your own numbers, so preparing accurate financial statements becomes far easier when your period is well defined.
- Preparing financial reports, including your annual accounts and financial statements
- Meeting tax compliance deadlines for BIR income tax and value-added tax (VAT)
- Planning your budget for the year ahead with a fixed start and end date
- Tracking performance across a consistent 12-month period
- Aligning your reporting window with your seasonal revenue
How to choose your fiscal year
If you run a corporation, the right fiscal year usually reflects how your business actually earns and spends. Weigh these factors before you decide.
- Revenue cycle: match your year-end to when sales naturally slow down
- Industry norms: align with how similar businesses in your sector report
- Tax planning: time your year-end to suit your income and deductions
- Cash flow: choose a close that lands when you have funds to settle obligations
This choice applies to corporations only; individuals use the calendar year. Your accounting method also shapes how income and expenses land in each period, so it helps to understand cash versus accrual accounting before you commit. A corporation that wants to change its accounting period must get approval from the BIR Commissioner and file a short-period return under NIRC Section 46.
Key tax deadlines for the Philippine fiscal year
Your fiscal year drives the dates you file and pay. The main deadlines below follow the close of your taxable year, based on BIR filing rules for corporate income tax.
- Annual income tax return: due on or before the 15th day of the 4th month after your taxable year closes (15 April for calendar-year businesses)
- Quarterly corporate income tax (BIR Form 1702Q): due within 60 days after the close of each of the first three quarters
- Quarterly VAT (BIR Form 2550Q): due by the 25th day after the close of each quarter
The monthly VAT return (BIR Form 2550M) was discontinued from January 2023 under the TRAIN Law, so VAT is now filed on a quarterly basis only.
Simplify your year-end reporting with Xero
Xero keeps your records current with automated bank feeds, so your books are ready well before your fiscal year closes. You can pull income tax and VAT figures straight from your data and run financial reports whenever you need them.
See how it fits your business and get one month free to start your first year-end with confidence.
FAQs on fiscal year
Here are quick answers to common questions about the fiscal year in the Philippines.
What is the difference between a fiscal year and a calendar year?
A calendar year always runs from 1 January to 31 December, while a fiscal year is any 12-month period ending on the last day of a different month. Both are 12 months long.
Can a Philippine business choose its own fiscal year?
Only corporations and partnerships may adopt a fiscal year. Individuals, including sole proprietors and freelancers, must use the calendar year.
When is the annual income tax return due in the Philippines?
It is due on or before the 15th day of the 4th month after the close of your taxable year. For a calendar-year business, that date is 15 April.
What is a taxable year?
A taxable year is the reporting period the Tax Code uses to assess your income. It can be either the calendar year or a fiscal year ending during that calendar year.
What are fiscal quarters?
Fiscal quarters are the four three-month blocks that make up your fiscal year. They set the timing for interim reporting and quarterly income tax and VAT filings.
Related terms
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Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.