Swiss sole proprietorship accounting: what's required

By Nathan Ganser, founder of Magic Heidi. Updated September 2026.

Bookkeeping obligations of a sole proprietorship: smaller than you think

Accounting for a sole proprietorship (Einzelfirma) in Switzerland is leaner than most guides make it look. Many people confuse legal duties with good habits.

The law is short. Under Art. 957 CO, a sole proprietorship with less than CHF 500'000 in revenue in the last financial year only has to keep records of three things: income, expenses and its financial position. That is simple bookkeeping, known in Switzerland as the «Milchbüechli-Rechnung» (milk book accounting). The law does not prescribe a specific system, software or chart of accounts.

With your tax return you also submit statements (Art. 125 DBG) of:

• Assets and liabilities
• Income and expenses
• Private withdrawals and private contributions

So record your private withdrawals from the very first month.

Just getting started? Read starting a sole proprietorship in Switzerland first. You'll find a template for simple bookkeeping under milk book accounting.

Three thresholds you need to know

Three numbers, three separate obligations. Two of them kick in at the same amount.

At CHF 100'000: two obligations, two authorities

The Commercial Register (Handelsregister) and VAT are not connected: registering your business does not sign you up with the ESTV (Federal Tax Administration). You handle both yourself.

For VAT, what counts is your revenue from taxable services in Switzerland and abroad. If you're just starting out and expect CHF 100'000 or more in your first 12 months, you are liable from day one. If you miss the registration with the ESTV, you owe the VAT retroactively. You usually can't charge it to your clients after the fact.

Once registered, you file quarterly (effective method) or semi-annually (net tax rate). Since 2025 you can also apply to file once a year and pay instalments in between. Which method suits you is explained in VAT for freelancers.

At CHF 500'000: rarer than guides suggest

Most solo self-employed people never reach this limit. If you get close, you'll be asking whether a sole proprietorship or a GmbH fits you better anyway. If you expect to reach the limit within the next two years, talk to a fiduciary at least a year before you do.

Three habits that will save your January

Keep business and private apart

The law does not require a separate business account. It is still the single most effective thing you can do.

Run everything business-related through one account at any Swiss bank. When you need money for yourself, transfer it to your private account as a private withdrawal. Otherwise you'll be puzzling in January over whether that restaurant bill on 3 July was a business dinner or a birthday.

With a bank import, incoming payments are matched to open invoices automatically.

Photograph receipts instead of collecting them

Receipts in a shoebox fade long before the ten-year retention period is up (Art. 958f CO). Photograph every receipt the day you get it and file it digitally.

An app with AI receipt scanning reads the date, amount and VAT rate for you.

Every expense needs two proofs

The business receipt shows what you spent the money on. The proof of payment shows that it was actually paid. Take a CHF 480 business dinner: the restaurant bill documents the occasion and the VAT, the card statement documents the payment.

The tricky ones:

• Card payments
• Foreign currencies
• Mixed receipts with private and business items on them

For things used both privately and for business, like your phone plan or a home office, record only the business share. Write down how you calculated it.

Private withdrawals instead of a salary: how it adds up

With a sole proprietorship you don't get a salary. You take money out of the business whenever you want. That is a private withdrawal (Privatentnahme). At year-end you are taxed on the profit, not on what you withdrew.

• Private account: not a bank account but a line in your books. It shows how much money has moved between you personally and the business.
• Equity: what stays in the business. Profit increases it, private withdrawals reduce it.

Example: Lara, a fictional translator in Basel

Lara is in her third year of self-employment and not liable for VAT. Her figures for 2026:

Lara's business expenses include software, training, professional liability insurance and her share of the home office. In her tax return, she declares the CHF 78'000 as income from self-employment. She doesn't pay extra tax on the CHF 63'000 she withdrew. It's her own money moving from the business account to her private account.

AHV: about 10 % of your profit

As a self-employed person you pay AHV, IV and EO (old-age, disability and income-compensation insurance) yourself: 10.0 % of your net profit, plus the compensation fund's administrative fees. Lower incomes pay a lower rate (sliding scale). For Lara that's roughly CHF 7'800 a year.

The compensation fund first charges provisional advance contributions. The final bill comes later, based on your tax assessment. So budget for them from day one. More on this in AHV for the self-employed.

Year-end closing for a sole proprietorship in 7 steps

1. List your income: every invoice of the year, split into paid and open.
2. List your expenses: every business expense with date, amount and VAT.
3. Check your receipts: are they all there and easy to find?
4. Record the closing bank balance: the business account balance on 31 December.
5. Close VAT: the annual reconciliation (finalisation) with the ESTV, if you are liable.
6. Add up private withdrawals and contributions.
7. Calculate your profit: income minus expenses. If you are VAT-registered, the VAT you pass on to the ESTV does not count as income.

You'll find the full walkthrough in year-end closing for sole proprietorships.

Do it yourself or hire a fiduciary?

A fiduciary typically costs a small sole proprietorship CHF 800 to 2'500 a year. In the first years, many solo self-employed people don't need one.

If you bring in a fiduciary, give them direct access in Magic Heidi. No shoebox full of receipts to hand over.