• Regular tracking of sales and expenses is essential for completing your tax declaration
• A self-employed person is considered a natural person, not a legal entity
• If you have questions, you can consult with a professional
• It's important to distinguish between private and commercial use

✔️ Natural Person: In the context of taxation, this term refers to an individual as a distinct legal entity subject to income tax and, in some cases, other forms of taxes (such as wealth tax).

✔️ Legal Entity: This is a legal structure such as a company or association that is subject to taxation.

✔️ AFC: Cantonal Tax Administration.

✔️ Revenue: Turnover/Sales

✔️ Alienation: This word describes the action of transferring property ownership from one person or entity to another. This can be done through various means, such as sale, donation, exchange, or any other form of transfer.

✔️ Receivable: A customer receivable is an amount of money owed to the business. It represents a sale for which payment has not been made. Most often, this receivable takes the form of an unpaid invoice. It can also be a loan contract with another person or company.

A self-employed person is considered a natural person for income tax purposes.
All income from primary or secondary business activity is subject to tax.

The type of accounting and declaration depends on your status and turnover.

A note regarding VAT liability:

This tax does not factor into income taxation since it only affects sales.

However, being VAT registered allows you to recover this tax on your expenses. If you have significant investments to make (vehicles, computers, licenses, others), you can recover the VAT on these purchases and deduct them. Don't hesitate to seek advice about VAT registration (not mandatory until CHF 100,000 in revenue).

To maintain uniformity, the forms below are made available by the Confederation. Therefore, you will have the same forms across all cantons through different platforms.

Form 02: Natural Persons Declaration

This form is the foundation of your declaration.

Part 2, number 2: Income from self-employed activity must be estimated using the following forms:

➥ Commercial accounting:

Form 15: Questionnaire for self-employed taxpayers maintaining commercial accounting

➥ Simplified accounting:

Form 15a: Questionnaire for self-employed taxpayers with simplified accounting

➥ Instructions accompany these forms:

Document 15b: Instructions concerning questionnaire 15 and 15a

These forms are "questionnaires" that must be submitted with your tax return. With digitalization, the online format will allow you to complete this through the AFC (tax administration) platform of your canton of residence.

Annual account closing is mandatory, regardless of the type of accounting.

A minimal presentation is required. You will find this indication at the beginning of each section explaining the questionnaire (documents to be provided in addition to the questionnaire).

Amounts should be rounded to the nearest franc.

Documents and supporting evidence related to self-employed activity must be kept for 10 years.

It is mandatory to provide this financial information and sign it.

Risks and financial penalties:

• Non-declaration: fine up to 10,000 francs
• Unintentional incomplete declaration: late tax payment and interest
• Incomplete declaration by a representative: fine up to 50,000 francs for the representative and participation in the entrepreneur's costs.

See Instructions concerning questionnaire 15 and 15a (with commercial or simplified accounting), Legal Bases, 1. Obligations to keep documents and supporting evidence and to establish statements and records

Here are the documents to provide in addition to the questionnaire:

• Balance sheet
• Income statement
• An appendix describing inventory and depreciation or other similar asset items
• Extracts from private accounts and equity capital

Note: The private account allows tracking of your private withdrawals and occasional contributions to the business. The capital account shows changes in wealth, particularly from previous years' results or capital contributions you may have made.

✤ Number 1: Net profit corresponds to the subtraction of sales and expenses for the fiscal year. This amount is recorded at the bottom of the income statement.

✤ Number 2: Non-tax-deductible expenses debited to the income statement correspond to expenses you make for your private life. These expenses are not related to the activity.

Example: Purchasing pet food for your companion animal while your business is in information technology.

Deductions for the 2nd pillar and 3rd pillar.
The 2nd pillar is optional as the manager of your company, the 3rd pillar is private insurance whose premiums cannot be deducted.

The private portion corresponds to the consumption of assets such as a car that has both private and commercial use.

Example: You visit a client to deliver products and pick up your children from school at the end of the day. The first trip is deductible as a business expense while the second is private and therefore non-deductible.

✔ For more information, you can consult numbers 3, 4, 5 of the following notice Notice N1/2007 - Benefits in kind for self-employed persons.

✤ Number 4: Benefits in kind are the use of company merchandise for your private use.

Example: A baker consumes their own bread. This consumption is considered income "in kind" and must be deducted from the result.

✔ For more information, you can consult numbers 1 and 6 of the following notice Notice N1/2007 - Benefits in kind for self-employed persons.

✤ Number 5: Commercial income not credited to the income statement refers to exceptional income such as the sale of depreciated machines on which you make a profit.

✤ Number 11: Personal AVS/AI/APG contributions of the self-employed person should be entered here. For more information, consult the Your Self-Employed AVS section at the bottom of this article.

✤ Number 12: Information on merchandise inventory corresponds to the inventory value at the beginning of the year and its value at year-end. Subtracting these two values reveals the balance and thus the inventory variation. This balance is part of the company's assets.

Inventories are generally provided in the appendix and are proof of stock values.

✤ Number 13: The depreciation table allows establishing the total value of your depreciation according to category: buildings, vehicles, machines/tools, installations, furniture.

Example: On January 1st of 20_1, you purchase a computer for 1500 francs for professional use and decide to depreciate it over 5 years.

At purchase, this computer will not be a 1500-franc expense for your company but will be considered an asset.

Here is the computer's depreciation schedule:

Per year, the expense is 300 francs for your company.

There are other depreciation methods.

For more information, you can consult the following notice: Notice A/1995 - Depreciation of fixed assets of commercial enterprises

✤ Number 14: Book extracts are account balances according to their titles directly reported from the general ledger.

Example: Letter a), purchases of merchandise and raw materials (including acquisition costs) are products purchased from your suppliers and transport costs (or other costs related to this purchase).

Here are the documents to provide in addition to the questionnaire:

• A statement of assets and liabilities (or in simple terms: bank account statements, pending payment invoices, inventory, value of your work tools such as vehicles, machines, appliances, listed securities that belong to your business and ongoing loans made as part of your self-employed activity) in a summary document.
• Records including your sales and expenses logbook (see section on Obligation to keep standard or simplified accounting)
• A statement of your private withdrawals and contributions

✤ Number 1: Determining turnover

The amount of receipts will be calculated based on bank deposits using your bank statements. Your Magic Heidi application allows you to check the status of your receipts at a glance!

For benefits in kind, you can consult Notice N1/2007 - Benefits in kind for self-employed persons.

Customer receivables are amounts owed by your clients on invoices.

✤ Number 2: Cost of goods and materials used

These are purchases directly related to your activity.

Example: A web designer purchased a series of photographs to put on a website under construction.

-For inventory amount, an inventory count is necessary.

✤ Number 3: You can determine your gross profit, which corresponds to your turnover minus costs (excluding exceptional receipts or those not related to your activity).

✤ Number 4: Other commercial income includes other receipts corresponding to rental income or loan interest, supplier discounts.

✤ Number 8: General expenses

If you employ staff, letters a), b), and c) should be filled in with amounts corresponding to salary expenses. These expenses are different from personnel costs hired through a temporary employment agency.

✣ Letter d), personal AVS/AI/APG contributions of the self-employed person should be entered. For more information, consult the Your Self-Employed AVS section below.

✣ Letter e), personal contributions to occupational pension schemes (2nd pillar) are not mandatory for the self-employed. We refer you to the Your Self-Employed 2nd Pillar section for our recommendations. You should know that you can deduct up to 100% of the annual insurance premium. Contributions to the 3rd pillar should be deducted in the tax declaration for natural persons (Form 02, number 13).

✣ Letter m), automobile expenses can be split between commercial and private use. You can consult Notice N1/2007 - Benefits in kind for self-employed persons, Number 5.

✤ Number 9: The depreciation table allows establishing the total value of your depreciation by category: buildings, vehicles, machines/tools, installations, furniture.

Example: On January 1st of 20_1, you purchase a computer for 1500 francs for professional use and decide to depreciate it over 5 years.

At purchase, this computer will not be a 1500-franc expense for your company but will be considered an asset.

Here is the computer's depreciation schedule:

Per year, the expense is 300 francs for your company.

There are other depreciation methods. For more information, you can consult:
Notice A/1995 - Depreciation of fixed assets of commercial enterprises

Reminder

This section is a brief reminder of information regarding AVS registration procedures. You can consult this article How to register for AVS as a self-employed person?

Before registering for AVS, you should verify if the criteria below apply to you.

This helps determine if your status is that of an individual entrepreneur:

•You present yourself as a business entity.

Your profession; you have your own letterhead and advertising material. Furthermore, you issue invoices in your name and account for value-added tax.

• You assume the economic risk.

You make, for example, long-term investments, use your own operating resources, assume collection risk, and pay rent for premises used for business activities.

• You organize your business freely.

You set your working hours, organize your work, and can delegate work to third parties. Additionally, you are free to choose which work you perform. Generally, you conduct your activity in premises outside your private residence.

• You work for multiple clients.

A lucrative activity based on a single mandate (one client) is generally considered dependent activity.

If you employ staff, you are also considered self-employed."

Extract from the document Contributions of self-employed persons to AVS, AI, and APG, Status as of January 1, 2024.

In addition to the criteria cited above, the obligation to contribute starts from CHF 2,300.

If you are registered with AVS as self-employed, these charges are 100% deductible. For more information, consult the document Self-employed persons' contributions to AVS, AI, and APG.

There are 2 scenarios for determining the amount you will need to pay.

If you are both self-employed and employed:

If the minimum share of CHF 514/year has already been deducted from your employed activity income, then you can request to contribute at the lowest current rate up to CHF 9,800. This is advantageous because the CHF 514 is a fixed amount and significantly reduces your net profit.

Example: A person who is both employed and self-employed has self-employment income of CHF 5,000.

We can see that the result is higher when declaring that the minimum share has already been paid through employed activity.

For annual income from CHF 9,300, the amount will be levied according to a degressive scale that you can consult in the document Self-employed persons' contributions to AVS, AI, and APG.

Your Self-Employed 2nd Pillar

You are no longer subject to mandatory insurance for other insurances as you would be as an employee. However, we recommend subscribing to accident insurance under LAA at minimum and to an occupational pension scheme for your retirement.

You can deduct the employer's share (minimum 50%) of this amount.

It's also good to consider taking out daily allowance insurance in case of illness, which will allow you to receive compensation in case of work incapacity due to illness and help you meet your expenses.