Fiscal Year vs Tax Year
The fiscal year is the company's operating calendar; the tax year is what the revenue authority cares about. They may or may not match.
Definitions
A fiscal year is what a company uses internally to budget, close books, and report to shareholders. A tax year is the period over which the local revenue authority computes the company's tax liability. For most jurisdictions, a company can elect a fiscal year that differs from the statutory tax year, but that election usually requires advance approval and produces a one-time short-period adjustment.
When they differ
A US C corporation may elect any 12-month fiscal year for federal income tax purposes; an S corporation must use a permitted fiscal year (calendar year unless it qualifies for a Section 444 election). Personal income tax is uniformly the calendar year for individuals.
In Canada, corporate tax follows the corporation's fiscal year; personal income tax is uniformly the calendar year. In the UK, the corporation tax accounting period follows the company's fiscal year; the personal Self Assessment year runs April 6 to April 5.
Practical consequence
Internal management reporting (P&L, budget variance, segment reporting) follows the fiscal year. External tax filings follow the tax year. Companies operating with a non-calendar fiscal year typically maintain a calendar-year tax provision schedule alongside the fiscal-year management close, with a reconciling adjustment at the boundary.
When the two can differ
In the United States, a corporation may elect a non-calendar tax year as long as it matches the company's books and the IRS approves on Form 1128. In the UK, the government accounting year (Apr 1) does not match the personal tax year (Apr 6), and companies file at any year-end of their choice. India distinguishes Financial Year (the operating year) from Assessment Year (the year of tax filing); both refer to the same reality through different labels.
A subsidiary inside a multinational often has two effective tax years: the local statutory year required by the host revenue authority, and the parent's consolidation year used for group reporting. Each requires its own set of trial balances, accruals, and audit walkthroughs. The cost of running both calendars is the price of doing business across borders.
Practical reconciliation
When tax year and fiscal year diverge, build a reconciliation that runs every period close, not just at year-end. The two systems agree on the underlying transactions; they disagree on cutoffs and on revenue recognition rules. Catching the variance every month is cheaper than catching it once a year — both in audit cost and in the risk of late-filed returns.