Depreciation for Swiss Freelancers: Rates, Calculations & Tax Reporting
You just bought a CHF 25,000 car for your freelance business. Should you deduct the full amount this year, or spread it across five years? Get the official ESTV rates and learn exactly how to calculate depreciation.
The Key Decision: Write Off or Depreciate?
Swiss freelancers using simplified accounting (Milchbüechli/carnet du lait) have a choice that most business owners don't: you can often write off purchases immediately instead of depreciating them over years.
When to Choose Each Method
Choose immediate write-off when:
- The asset costs under CHF 3,000
- You had a high-income year and want to reduce taxes now
- You prefer simpler bookkeeping
- Your canton allows aggressive write-downs (Basel-City, Bern, Grisons, Zurich)
Choose depreciation when:
- The asset exceeds CHF 20,000
- You expect higher income in coming years
- You want stable, predictable expenses
- Multiple large purchases would create suspiciously low taxable income
Important: Swiss tax law doesn't legally require freelancers to depreciate assets. However, writing off a CHF 50,000 vehicle in a year where you earned CHF 60,000 will likely trigger questions from tax authorities.
ESTV Depreciation Rates (2025)
The Federal Tax Administration (ESTV) publishes maximum depreciation rates in Merkblatt A 1995. Here are the rates Swiss freelancers use most.
| Asset Type | Declining Balance | Linear (Straight-Line) |
|---|---|---|
| Vehicles | 40% | 20% |
| Computers & IT equipment | 40% | 20% |
| Office furniture | 25% | 12.5% |
| Machinery & tools | 25-30% | 12.5-15% |
| Software licenses | 40% | 20% |
| Patents & intellectual property | 40% | 20% |
| Commercial buildings | 2-4% | 1-2% |
Quick rule: Linear rates are half the declining balance rates.
Cantonal Differences Matter
Some cantons allow more aggressive depreciation than federal guidelines:
- Basel-City, Bern, Grisons, Zurich: May permit immediate write-down to 20% or even zero in the first year
- Other cantons: Generally follow ESTV rates
Always check with your cantonal tax office (Steueramt/administration fiscale) before assuming you can write off large assets immediately.
Depreciation Methods
Explained
Choose the right method based on your business needs and tax strategy.
Declining Balance (Degressive)
You apply the percentage to the remaining book value each year. The deduction shrinks over time.
- Maximizes early deductions
- Best for assets losing value quickly
- Ideal for technology purchases
- Front-loads tax benefits
Linear (Straight-Line)
You deduct the same amount every year until the asset reaches zero.
- Predictable annual expenses
- Simpler calculations
- Best for furniture & machinery
- Steady tax benefits over time
Declining Balance Example: CHF 10,000 Laptop at 40%
| Year | Book Value Start | Depreciation | Book Value End |
|---|---|---|---|
| 1 | CHF 10,000 | CHF 4,000 | CHF 6,000 |
| 2 | CHF 6,000 | CHF 2,400 | CHF 3,600 |
| 3 | CHF 3,600 | CHF 1,440 | CHF 2,160 |
| 4 | CHF 2,160 | CHF 864 | CHF 1,296 |
| 5 | CHF 1,296 | CHF 518 | CHF 778 |
Linear Example: CHF 10,000 Laptop at 20% (5 years)
| Year | Depreciation | Book Value End |
|---|---|---|
| 1 | CHF 2,000 | CHF 8,000 |
| 2 | CHF 2,000 | CHF 6,000 |
| 3 | CHF 2,000 | CHF 4,000 |
| 4 | CHF 2,000 | CHF 2,000 |
| 5 | CHF 2,000 | CHF 0 |
How to Calculate Depreciation
Follow these four steps to accurately calculate depreciation for any business asset.
Four Steps to Accurate Depreciation
A systematic approach to calculating depreciation for your freelance business.
Step 1: Asset Cost
Include purchase price plus delivery, installation, and modifications.
Step 2: Useful Life
40% rate = ~5 years, 25% rate = ~8 years, 4% rate = 25+ years.
Step 3: Choose Method
Declining balance for faster deductions, linear for simplicity.
Step 4: Calculate
Apply your formula consistently each year.
Calculation Formulas
Declining balance formula:
Current Book Value × Rate = Annual Depreciation
Linear formula:
Original Cost ÷ Useful Life = Annual Depreciation
Real-World Example: Photographer's Camera
Sarah, a freelance photographer in Zurich, buys a CHF 8,000 camera system.
Option A: Immediate Write-Off
- 2025 expense: CHF 8,000
- Taxable income reduction: CHF 8,000 in year one
Option B: 40% Declining Balance
- Year 1: CHF 3,200
- Year 2: CHF 1,920
- Year 3: CHF 1,152
- Year 4: CHF 691
- Year 5: CHF 415
- Remaining: CHF 622 (can write off when sold or scrapped)
If Sarah earned CHF 120,000 in 2025, writing off CHF 8,000 immediately makes sense. If she earned CHF 50,000 and expects CHF 100,000 next year, depreciation spreads the benefit to higher-tax years.
Recording Depreciation on Your Tax Return
Most cantons provide Hilfsblatt A (auxiliary form A) for self-employed individuals. Here's what you need to know.
For Simplified Accounting (Milchbüechli)
What to include on Hilfsblatt A:
- Asset description
- Purchase date
- Original cost
- Depreciation rate used
- Current year's depreciation amount
- Remaining book value
In Your Accounting Records
For each depreciable asset, create entries like:
Description: MacBook Pro (40% depreciation) - Year 1/5
Date: 31.12.2025
Amount: CHF 1,080
Description: MacBook Pro (40% depreciation) - Year 2/5
Date: 31.12.2026
Amount: CHF 648
Keep these documents:
- Original purchase invoice
- Your depreciation schedule
- Any maintenance or upgrade receipts
Advanced Depreciation
Strategies
Maximize your tax benefits with these Swiss-specific depreciation strategies.
Claim missed depreciation in future years
50% deduction in first two years
Depreciate only business portion
Understand recapture rules
Catch-Up Depreciation
Had a bad year and skipped depreciation to show higher income? You can catch up in future years.
If you only depreciated CHF 1,000 of a CHF 4,000 allowance in 2024, you can claim the extra CHF 3,000 in 2025 or later—as long as you don't exceed the maximum cumulative depreciation.
Energy-Saving Investments
Investments promoting energy savings (solar panels, heat pumps, better insulation) get special treatment: up to 50% can be deducted in the first two years.
This applies to business-use property and can significantly accelerate your deductions.
Vehicle Private Use
If you use a vehicle for both business and personal purposes:
- Determine business use percentage (keep a logbook)
- Only depreciate the business portion
- Common split: 50-70% business use for freelancers
Example: CHF 30,000 car, 60% business use = CHF 18,000 depreciable value.
What Happens When You Sell
If you sell a depreciated asset for more than its book value, the difference is taxable income (depreciation recapture).
Example:
- Original cost: CHF 10,000
- Book value after depreciation: CHF 2,000
- Sale price: CHF 5,000
- Taxable recapture: CHF 3,000
Common Depreciation Mistakes
Swiss freelancers often make these errors. Here's how to avoid them.
Using US Tax Concepts
Section 179 doesn't exist in Switzerland—Swiss rules are different.
Missing Documentation
Always keep proper invoices for all depreciable assets.
Switching Methods
You can't change depreciation methods mid-asset without good reason.
Over-Depreciating
Don't exceed ESTV maximum rates—it triggers audits.
Ignoring Cantons
Cantonal differences could save you money.
Poor Tracking
Track accumulated depreciation across all years.
Depreciation Checklist for Year-End
- List all assets purchased this year over CHF 1,000
- Decide: immediate write-off or depreciate?
- Calculate depreciation for existing assets
- Update your depreciation schedule
- Verify you have invoices for all depreciable assets
- Check if any assets were sold or scrapped
- Prepare figures for Hilfsblatt A
Simplify Depreciation with the Right Tools
Tracking depreciation manually works for one or two assets. But as your freelance business grows, spreadsheets become error-prone and time-consuming.
Automated Depreciation Tracking
Magic Heidi automatically calculates depreciation using Swiss-compliant rates, tracks accumulated depreciation across years, and prepares the figures you need for your tax return.
- 🧾Swiss Rates Built-In
ESTV-compliant calculations
- ⚡Automatic Tracking
Year-over-year depreciation
- ✨Tax-Ready Reports
Hilfsblatt A figures prepared
- 🌍Both Methods
Linear or declining balance
- Invoice #3
Magic Heidi
CHF 500
Jan 29
- Invoice #2
Webbiger LTD
CHF 2000
Jan 24
- Invoice #1
John Doe
CHF 600
Jan 20
Key Takeaways
Everything you need to remember about Swiss depreciation.
Choice Available
Swiss freelancers can choose between immediate write-off and depreciation.
ESTV Rates
40% declining balance for vehicles/computers, 25% for furniture.
Linear Rule
Linear rates = half the declining balance rate.
Canton Benefits
Basel, Bern, Grisons & Zurich allow aggressive first-year write-downs.
Keep Records
Always maintain invoices and a depreciation schedule.
Energy Bonus
Energy-saving investments qualify for 50% deduction in first two years.
Further Resources
Where can I find official ESTV depreciation rates?
The official rates are published in ESTV Merkblatt A 1995, available at estv.admin.ch. This document contains the maximum allowable depreciation rates for all asset categories.
Where can I learn more about Swiss SME regulations?
The kmu.admin.ch portal is the official Swiss SME resource, offering guidance on accounting, taxation, and business regulations for freelancers and small businesses.
How do I find my canton-specific depreciation rules?
Contact your cantonal tax office (Steueramt/administration fiscale) directly. Each canton may have different rules, especially regarding first-year write-down allowances.
Stop Wrestling with Depreciation Spreadsheets
Magic Heidi automatically calculates Swiss-compliant depreciation and prepares your tax return figures. Try it free today.