Accounting during liquidation of an economic association 

When the association has gone into liquidation, the liquidator represents the association. This means that the liquidator is responsible for signing and submitting documents such as tax returns and income statements.

The association's accounts

Until a liquidator is appointed, the association's board and managing director are responsible for the association's accounts. When the liquidator takes up his duties, the association's board and managing director must submit accounts for the period from the last annual report or interim report up to the date of liquidation.

As long as the association is registered with the Swedish Companies Registration Office, the liquidator must submit an income tax return for the association. This is the case even if the liquidator has filed for deregistration for VAT, employer's contributions and F-tax to the Tax Agency.

Reversal of funds

The association shall reverse previous provisions to tax allocation reserve when a decision has been made that the association will enter liquidation. If the association also has other provisions for untaxed reserves, they shall normally be reversed at the same time. This means that the reversals affect the financial statements drawn up by the board and the managing director when the liquidator takes office.

Final statement of accounts

When the distribution is complete, the liquidator makes a statement of this, known as the deed of distribution. The document shows the association's liabilities and assets. Once the distribution is complete, a final report must be discussed at the association's general meeting. As soon as the final accounts are approved by the general assembly, the association ceases to exist. This must be notified immediately to the Swedish Companies Registration Office

Accounting in member income tax returns

When the association goes into liquidation, you are deemed to have sold your shares in the association and you, as a member, must calculate the capital gain or loss on your shares. Anything distributed to a member on dissolution of an association in excess of the initial investment is taxed as a dividend.

In cases where the funds distributed do not equal the amount of expenses, a loss is incurred. Deduction of the loss is only allowed when the loss is final, which is normally when the liquidation is completed. The loss shall be accounted for in accordance with the rules in force at the time when the liquidation was decided.

Tax account

The association's tax account remains in existence even after the association has been liquidated. For the association to avoid tax account statements, the balance on the account must be zero.