Bookkeeping Rules in Switzerland: What Your Business Must Record and Keep
Who needs full double-entry accounts in Switzerland, when simple income and expense records are enough, what the annual accounts contain, how long to keep records and when an audit is required.
Good records are not just a tax formality in Switzerland. The Code of Obligations (OR) sets clear rules for what a business must record, how it must present its accounts and how long it must keep the paperwork. Tax offices, the VAT authority and banks all rely on those records.
The good news for small businesses is that the rules scale with size. A freelancer with modest turnover has far lighter duties than a company. This guide explains where the lines are.
Two levels of bookkeeping
Article 957 OR divides businesses into two groups.
Full bookkeeping and accounts
These businesses must keep double-entry accounts and produce proper annual accounts:
- all companies, including every GmbH and AG, whatever their size;
- sole proprietorships and partnerships with turnover of CHF 500,000 or more in the last financial year.
Simplified records
Sole proprietorships and partnerships with turnover below CHF 500,000 only need to record their income, expenses and financial position. This is often called a Milchbüchleinrechnung, a "milk book" account, after the little notebooks once used by dairy farmers.
Simplified does not mean careless. The Federal Tax Administration explains that even businesses outside the full bookkeeping duty must record income and expenses, assets and debts, and private withdrawals and deposits. Entries should be made in order, promptly and completely, and kept so they cannot be changed afterwards. Each entry should show who paid or was paid and what for.
If you are deciding between a sole proprietorship and a company, the bookkeeping burden is one practical difference to weigh.
What the annual accounts contain
For businesses with full bookkeeping, the annual report consists of:
- the balance sheet, showing assets, liabilities and equity at the year end;
- the income statement (profit and loss);
- the notes, with extra information required by law, for example on guarantees or the average number of full-time employees.
Larger companies that must have an ordinary audit also prepare a cash flow statement and a management report.
The accounts must follow the principles of proper accounting: they must be complete, clear, accurate, prudent and consistent from year to year. Most small companies use standard Swiss accounting software and a chart of accounts based on the Swiss SME template, which accountants and fiduciaries know well.
Deadlines
For a GmbH or AG, the shareholders must approve the annual accounts within six months of the end of the financial year. The accounts then form the basis of the company's tax return. Our guide to corporate tax explains how taxable profit is worked out from them.
How long to keep records
Article 958f OR requires businesses to keep their books, accounting vouchers, annual reports and audit reports for ten years, counted from the end of the financial year.
The ESTV adds some points for VAT-registered businesses:
- records must be kept at least until the tax claim is time-barred, and for at least ten years;
- documents relating to real estate must be kept for 20 years;
- electronic invoices must stay electronic. Printing them out and deleting the original is not allowed, because the proof of origin is lost.
The annual report and the balance sheet must be signed by the person responsible.
Records can be kept on paper or electronically, as long as they stay readable and cannot be altered unnoticed. Cloud accounting is common and accepted, provided the data can be produced on request.
VAT and bookkeeping
If your business is registered for VAT, the tax authority expects a clear trail from each invoice or receipt, through the accounts, to the VAT return and back again. Poor records can lead the ESTV to estimate the VAT you owe, which rarely works in your favour. During a tax audit, you must provide documents free of charge.
Keep VAT-relevant details on every invoice you issue: your VAT number, the date, the description of the service, the amount and the rate applied.
When an audit is required
Not every company needs an external auditor. The OR has three levels:
- Ordinary audit. Required if a company exceeds two of these three thresholds in two consecutive years: balance sheet total of CHF 20 million, turnover of CHF 40 million and 250 full-time positions on annual average.
- Limited audit. The standard for all other companies.
- No audit (opting out). Companies with no more than ten full-time positions on annual average can waive the limited audit, if all shareholders agree. The opting-out is entered in the commercial register.
Most new small companies choose the opting-out. Shareholders can reverse it later, for example if a bank or investor wants audited accounts.
Practical tips for small businesses
- Separate private and business money from day one. A dedicated business bank account makes bookkeeping much easier.
- Record transactions monthly, not at the end of the year.
- Keep salary records carefully if you have staff. Payroll feeds into social insurance and tax. See our guide to hiring employees.
- Back up digital records in at least two places.
- Get help early. A fiduciary (Treuhänder) can set up your chart of accounts and handle year-end work at a fixed fee.
Why it matters
Clean books protect you in a tax audit, make VAT returns simple and give you a true picture of how the business is doing. They are also the first thing a bank looks at when you ask for a loan.
This guide is a summary, not legal or tax advice. The exact duties depend on your legal form and size, so check the Code of Obligations and speak to a fiduciary for your own situation.
