This kind of short form is commonly used and can be used in any situations, formal or informal. For year 1994, I would write as either 九四年 or 94年 but 2005 as 05年 or Ｏ五年, because Chinese don't very much like to write 零 for numbers (二零零五年 is acceptable but rather uncommon). To figure out which year it stands for exactly, you need to consider the context (just think your boss tell you that he will talk to you at 3 o'clock, you would not expect it is 3:00 am right?), but generally, it would be the nearest suitable year for the short form, for example, 05年 for 2005, 89年 for 1989.I must say that's not what I was expecting!
So you mean that I can say 九四年 but not write it? What about more problematic years, that is, the first ones in a century? Will 05年 cause the same confusion as it does in European languages?
Oh, and for 05年，it is supposed to be read as "lin wu nian". The 0 at the beginning should not be ignored.Thanks for this great information. Beginning a number with a zero sure allows for more freedom than I'm used to.
PS. I couldn't find the circle when I was writing. I just found out why.