diff --git a/src/metabase/formatter/datetime.clj b/src/metabase/formatter/datetime.clj
index c8680ca6ecad0ed0ad0eb11a1b9f7a5b657a04f9..c02ded056438b3bb2bb358b0e2c1c0ab54cb1703 100644
--- a/src/metabase/formatter/datetime.clj
+++ b/src/metabase/formatter/datetime.clj
@@ -102,7 +102,13 @@
                          (str/replace #"DDD" "D")))]
     (-> conditional-changes
         ;; 'D' formats as Day of year, we want Day of month, which is  'd' (issue #27469)
-        (str/replace #"D" "d"))))
+        (str/replace #"D" "d")
+        ;; 'YYYY' formats as 'week-based-year', we want 'yyyy' which formats by 'year-of-era'
+        ;; aka 'day-based-year'. We likely want that most (all?) of the time.
+        ;; 'week-based-year' can report the wrong year on dates near the start/end of a year based on how
+        ;; ISO-8601 defines what a week is: some days may end up in the 52nd or 1st week of the wrong year:
+        ;; https://stackoverflow.com/a/46395342 provides an explanation.
+        (str/replace #"YYYY" "yyyy"))))
 
 (def ^:private col-type
   "The dispatch function logic for format format-timestring.
diff --git a/test/metabase/formatter/datetime_test.clj b/test/metabase/formatter/datetime_test.clj
index c2a0ca36e20bd2ac0da8a98806e54c37eef72033..2d30746dc907356cfc33f39b68d388e9fc6fc2c6 100644
--- a/test/metabase/formatter/datetime_test.clj
+++ b/test/metabase/formatter/datetime_test.clj
@@ -241,3 +241,20 @@
       (let [col {:unit           :default}]
         (is (= "15:30:45Z"
                (datetime/format-temporal-str "UTC" "15:30:45Z" col nil)))))))
+
+(deftest year-in-dates-near-start-or-end-of-year-is-correct-test
+  (testing "When the date is at the start/end of the year, the year is formatted properly. (#40306)"
+    ;; Our datetime formatter relies on the `java-time.api`, for which there are many different, sometimes confusing,
+    ;; formatter patterns: https://docs.oracle.com/javase/8/docs/api/java/time/format/DateTimeFormatterBuilder.html#appendPattern-java.lang.String-
+    ;; In this case, 'YYYY' is a week-of-year style year, which calculates which week a date falls into before returning the year.
+    ;; Sometimes days near the start/end of a year will fall into a week in the wrong year.
+    ;; For example, apparently 2023-12-31 falls into the 1st week of 2024, which probably not the year you'd expect to see.
+    ;; What we probably do want is 'yyyy' which calculates what day of the year the date is and then returns the year.
+    (let [dates (fn [year] [(format "%s-01-01" year) (format "%s-12-31" year)])
+          fmt (fn [s]
+                (datetime/format-temporal-str "UTC" s {:field_ref      [:column_name "created_at"]
+                                                       :effective_type :type/Date}
+                                              {::mb.viz/column-settings
+                                               {{::mb.viz/column-name "created_at"} {::mb.viz/date-style "YYYY-MM-dd"}}}))]
+      (doseq [the-date (mapcat dates (range 2008 3008))]
+        (is (= the-date (fmt the-date)))))))