Can my first financial year last eighteen months?

The short answer

Yes, if that fits the articles of association and incorporation. An extended first financial year must be processed correctly in the records and tax return.

Basis: art. 2:10a, 2:210 and 2:394 DCC

What do the articles of association say about the first financial year?

A first financial year does not have to last exactly twelve months. The provision in the articles of association and the incorporation date determine which period applies. Eighteen months may therefore be possible. You cannot choose that period afterwards solely in your reporting software because it turns out favourably. Check the deed and discuss deviations with the notary and a tax adviser.

Art. 2:10a DCC takes the calendar year as its starting point, unless the articles of association designate a different financial year. The Belastingdienst (the Dutch Tax Administration) confirms that the first financial year of a newly incorporated company can be longer or shorter and that the tax year follows the financial year in the articles. A BV incorporated halfway through a year can therefore let its first reporting period run to the end of the following calendar year if the provision is set up that way. State the precise dates. The term 'financial year 2025' is too unclear when the file also contains months from another calendar year.

How do you report over eighteen months?

Include all transactions within that reporting period and keep the opening position visible separately. Incorporation costs, payments on shares and acquired activities each call for their own treatment. An extended financial year does not mean that VAT or payroll tax returns may also wait eighteen months. Those obligations follow their own periods. So make a plan that distinguishes the annual reporting year from periodic returns. When taking over an existing business, also check which figures belong to the new BV. The predecessor's records are not, without further assessment, the company's opening balance sheet.

Calculate the annual accounts deadlines from the end of the actual financial year. For an ordinary BV, art. 2:210 and 2:394 DCC are relevant for preparation and publication. So do not automatically take 31 December of the incorporation year as the starting point for those deadlines. As regards content, depreciation, interest and accruals deserve extra attention: they must match useful life, contracts and the real reporting period. Do not unthinkingly compare turnover over eighteen months with a budget over twelve months. Make the length of the period visible in the report and in analyses for the bank or shareholder.

From which date do the deadlines run?

Agree with your adviser how the first annual accounts and the tax return are submitted. Check that the chosen software accepts the period and uses the right dates in all output. The next normal financial year may be shorter than the first reporting period; explain that difference when comparing results. Keep the deed of incorporation, opening balance sheet and the reconciliation with any acquired records in the file. An extended first financial year can be practical administratively, but it saves no support for the figures. It is mainly a choice about the reporting period, with consequences for planning, comparison and technical processing.

Sources

• Belastingdienst: taxable amount and financial year
• KVK: deadline for filing the annual accounts

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