Accounting during bankruptcy of a trading or limited partnership

Company income tax return

Until the bankruptcy decision, the company must pay tax on the income incurred before the bankruptcy decision. The company must account for taxes in the usual way. For example, if the company owns a property, it must pay property tax for as

Income tax returns must be filed until the company is deregistered, whether or not there is any income to declare. It is the responsibility of the partners who represented the company until the bankruptcy to file the company's tax return.

Employer contributions

The company's operations cease with the bankruptcy decision. Therefore, the company must also not be registered as an employer for the period after the bankruptcy decision. The company must report employer contributions and deducted tax for all accounting periods up to the bankruptcy decision.

If the company has nothing to report, the button "Declare zero" ("Deklarera noll") can be found in the Swedish Tax Agency's e-service Arbetsgivardeklaration. If you cannot use the e-service, you can instead submit the form Arbetsgivardeklaration Huvuduppgift (SKV 4786). Fill in a zero in box 487 and a zero in box 497. Leave the other boxes blank.

Form "Arbetsgivardeklaration Huvuduppgift" (SKV 4786) at The Tax Agency

VAT

The company's operations cease with the bankruptcy decision. Therefore, the company must also not be registered for VAT for the period after the bankruptcy decision. The company must report VAT for all accounting periods up to the bankruptcy decision. If the company has no VAT to report, enter zero (0) in the box "Moms att betala eller få tillbaka" ("VAT to pay or get back").

Report VAT at The Tax Agency

Pay correct preliminary tax

The preliminary tax that you pay today is probably no longer correct when you close your company. This is because your business profit is affected by the sale of stock, own withdrawals and funds that are to be returned for taxation. In order to pay the correct preliminary tax, you should therefore submit a new preliminary income tax return.

If you do not submit a new preliminary income tax return, you must continue to pay the same preliminary tax as before.

If the company has paid debited preliminary tax because it owns a property or because of special pension costs, you also need to submit a new preliminary income declaration for the company.

Change your debited preliminary tax at The Tax Agency (in Swedish)

Tax account

The tax account is not affected by the bankruptcy of the company. However, the tax account statements will be sent to the receiver until the bankruptcy is concluded.

Partner's income declaration

As a rule, you, as a partner, are obliged to pay tax on all the company’s income. This also applies when the company is declared bankrupt. For example, you must pay taxes for:

• capital gains on property sold by the bankruptcy estate.
• claims which have arisen in economic activities before the bankruptcy and invoiced by the receiver
• income from economic activities in which someone has carried out economic activities outside the bankruptcy estate after the bankruptcy, even though such activities are not permitted during bankruptcy.

What are the rules for deducting losses?

Has a company been declared bankrupt, but not its partners? In this case, the partners retain the right to deduct the unused deficits incurred by the company before the bankruptcy. Such a deficit can be used, for example, against a capital gain on a property owned by the company and sold during the bankruptcy.

When the bankruptcy is completed without any surplus, the company is dissolved. If there is still a deficit then and it is not used, it cannot be used in a later year. The residual deficit in bankruptcy does not reduce your adjusted acquisition cost, so you effectively get a deduction when calculating capital gains/losses instead.

Funds

You must reverse tax allocation reserves, replacement funds and expansion funds for taxation. This means that you must include the amount reversed as income in the tax assessment for the tax year in which the bankruptcy order was made.

Interest distribution

You can make interest distribution even on your final statement of economic activity in bankruptcy. The interest distribution can be either positive or negative and shall be calculated on the capital base. The capital base is calculated taking into account the assets and liabilities existing at the beginning of the tax year.

You may make a positive interest distribution if there was a positive capital base of more than SEK 50,000 at the end of the last financial year. When activities cease, positive interest distribution can also be made for reversed tax allocation reserves as well as reduction of expansion funds.

You must make a negative interest distribution if there is a negative capital base of more than SEK 50,000 at the end of the last financial year.

You must adjust the amount of the distribution according to the length of the financial year if your last financial year is shorter than 12 months. You can make this adjustment up to and including the bankruptcy decision.