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Deregistering a sole trader in the event of bankruptcy

When a sole trader is declared bankrupt, the Tax Agency is informed by the District Court. Read more here about what happens in bankruptcy.

The Tax Agency:

  • revokes your approval for F-tax
  • deregisters from VAT
  • deregisters as an employer.

If the receiver decides to continue to operate the activity, it is the bankruptcy estate that becomes liable for tax. The bankruptcy estate also receives a special company registration number.

Business without F-tax

If you are in bankruptcy, you may not carry on any activity involving the obligation to keep accounts and therefore the Tax Agency revokes your F-tax approval. There is one exception to the rule that you may not carry on an activity when you are bankrupt, namely the operation of an agricultural business.

When your approval for F tax is revoked, you no longer have the right to use the F tax when entering into new contracts. It is therefore important that you change your invoices so that they contain correct information. When you have A-tax, the person who pays compensation for work done to you must deduct 30 percent of the work cost.

Change your debited preliminary tax

Your debited preliminary tax is called special A-tax (SA-tax) after the Tax Agency has revoked your approval for F-tax.

Your debited preliminary tax is not reduced just because you have been declared bankrupt. If you do not file a new preliminary income tax return, you will continue to pay the same preliminary tax as before.

Debited preliminary tax and preliminary income declaration at the Tax Agency

E-services and representatives

Have you notified someone who is authorised to look at or provide information on your behalf via the Tax Agency's e-services? If so, the Tax Agency will deregister this representative in connection with the bankruptcy.

Remember that you may need to notify other public authorities that you are closing your activities if you have previously registered your activities with them.