Financial year for your company

A financial year should contain 12 months. When starting up your business the first financial year is allowed to be shorter than 12 months or extended up to 18 months. When the company terminates its business, the financial year may be shortened but not extended.

The financial years that do not follow the calendar year, i.e. January 1 to December 31, are called broken financial years.

Calendar year

The financial year must be a calendar year (1 Jan-31 Dec) for the following companies:

• Sole traders.
• Trading partnerships where a natural person must be taxed for all or part of the company's income.
• Community management legal entities.

Broken financial year

Other companies and associations than those enumerated above, for example limited liability companies, non-profit and economic associations, and trading partnerships with only legal partners, may have broken financial years. A broken financial year must begin on the first day of a calendar month, include 12 full months, and end on the last day of a calendar month, for example, October 1 to September 30.

In the case of newly formed limited companies, economic associations and trading partnerships with legal persons as partners, broken accounting years are approved without the permission of the Swedish Tax Agency.

If, on the other hand, you want to change from a calendar year to a broken financial year, permission from the Swedish Tax Agency is required in most cases.

How to change financial year for limited companies at the Swedish Companies Registration Office (in Swedish)
How to change financial year for economic associations at the Swedish Companies Registration Office (in Swedish)