Quick answer
A new Estonian company’s first financial year (majandusaasta) starts on the day it is entered in the Commercial Register. With the standard calendar year it ends on 31 December. A company registered on or after 1 July may instead run its first year to 31 December of the following year, because the Accounting Act allows a first financial year of up to 18 months. The first annual report covers exactly that period.
Does an OÜ registered in December have to file a report for just a few weeks? Has a company registered in January already missed its deadline? The answer to both depends on when the first financial year ends. The general rules on annual report filing in Estonia are on our service page; this guide covers the first year.
When does the first financial year of an Estonian company end?
Under § 13 of the Accounting Act, a financial year (fiscal year, in American usage) lasts 12 months and matches the calendar year unless the articles of association set another period. When a company is founded or changes its financial year, that year may be shorter or longer than 12 months, but never longer than 18.
For a new company, the first financial year starts on the registration date and ends on the next year-end date, or on the following one if that is still within 18 months of registration.
With a calendar year, the cut-off is 1 July:
- Registered between 1 January and 30 June: the first year ends on 31 December of the same year.
- Registered on or after 1 July: the first year ends on 31 December, or on 31 December of the following year. From 1 July to 31 December of year 2 is exactly 18 months.
The last row of the table below applies the same rule to a non-calendar year.
First annual report: examples by registration date
The annual report is due six months after the financial year ends, which gives these first-year dates:
| Registration date | First financial year ends | First annual report due |
|---|---|---|
| 15 March, year 1 | 31 December, year 1 | 30 June, year 2 |
| 30 June, year 1 | 31 December, year 1 (extending would exceed 18 months) | 30 June, year 2 |
| 1 July, year 1 | 31 December, year 1 or year 2 | 30 June, year 2 or year 3 |
| 10 December, year 1 | 31 December, year 1 or year 2 | 30 June, year 2 or year 3 |
| 10 February, year 1, with a July–June financial year | 30 June, year 1 or year 2 | 31 December, year 1 or year 2 |
Should a new company use an 18-month first year?
A long first year means one report instead of two, which suits most companies registered late in the year. A short year produces financial statements sooner, and banks, payment providers and investors sometimes ask for them. Dividends are normally paid out of profit shown in an approved annual report, so an 18-month year also delays the first ordinary dividend.
Rule of thumb: a slow starter gains from the longer period, while a company that trades, raises money or plans payouts from the outset usually does better with the short one.
What the longer year does not postpone
The 18-month rule moves only the annual report. Bookkeeping starts on registration, and tax returns keep their own monthly rhythm: the TSD whenever salaries, board fees or dividends are paid, and the KMD once the company has a VAT number. Corporate income tax is declared for the month in which profit is distributed. See our tax calendar for Estonian companies.
Choosing a non-calendar financial year
A different financial year suits seasonal businesses closing the books after the busy period, and subsidiaries that report in step with a foreign parent. The financial year is set in the articles of association. The Company Registration Portal lets you replace the pre-set calendar year in the founding application, so registration is the simplest moment to choose.
How to change the financial year of an Estonian OÜ
An existing company amends its articles of association:
- The shareholders adopt a resolution amending the articles. In an OÜ this needs at least two-thirds of the votes; a sole shareholder signs a written resolution.
- The board files the resolution and the new articles with the Commercial Register and pays the state fee. Filing goes through the e-Business Register with an Estonian digital signature, or through a notary.
- The change takes effect when the registrar makes the entry.
The year of the change is a transition year of up to 18 months. A calendar-year company moving to a July–June year during year 2 can close a six-month transition year on 30 June, year 2, or an 18-month one on 30 June, year 3.
The catch is timing: a closed year cannot be changed retroactively, so the amendment must be registered before the current financial year ends, and before the new year-end date if that comes earlier.
Plan your company’s first financial year with our accountants
Our accounting team keeps the books for founders and e-residents from day one, and our specialists prepare and file the first annual report for your Estonian OÜ for the period you choose. We also prepare the documents for a change of financial year.
Frequently Asked Questions
No. The longer period is an option, not automatic: you choose it by entering the reporting period dates when you create the first annual report in the e-Business Register.
A ready-made company keeps the financial year that started on its own registration date, not on the date you bought it. If that year has already ended, its annual report is due even if the company never traded.
On the company’s registry card in the e-Business Register.
