Tax return for sole proprietorships in Switzerland – explained simply

Anyone running a sole proprietorship in Switzerland with an annual turnover of less than CHF 500,000 benefits from simplified accounting obligations. Yet every year, the same question arises: how do I correctly complete my tax return — without double-entry bookkeeping?

Here, you will learn step by step what you really need — and how to avoid unnecessary stress.

Does a sole proprietorship under CHF 500,000 need double-entry bookkeeping?

No. According to Art. 957 CO, a turnover of less than CHF 500,000 is sufficient for simple accounting.

This means:

• No double-entry bookkeeping
• No balance sheet requirement
• No income statement
• No complex chart of accounts

A so-called “milk bookkeeping” method — a systematic record of income and expenses — is allowed. This significantly reduces administrative effort. Important: Even with simplified accounting, you are required to document your asset situation in addition to income and expenses (asset inventory per Art. 957 para. 2 CO).

How does simple accounting (milk bookkeeping) work?

The calculation is straightforward: Income - Expenses = Profit

This profit is considered:

• Personal income
• Basis for income tax
• Basis for AHV contributions

Important: Even if you do not transfer the profit to your personal account, it is still taxable.

What does the tax office require for the tax return?

For your sole proprietorship tax return, you need:

• Total income
• Total expenses
• Net profit
• Overview of business assets (e.g., business account, outstanding invoices)

The profit is entered in the self-employed section of your personal tax return. For small sole proprietorships, this is all that is required.

Which expenses are deductible?

In small businesses, the savings potential is significant. Typical deductible business expenses include:

• Home office portion (lump sum or actual costs, depending on the canton)
• Phone & Internet (business portion)
• Software subscriptions (e.g. accounting software, cloud storage)
• Website & marketing
• Continuing education (where professionally relevant)
• Work materials and office supplies
• Vehicle costs (business portion — mileage allowance or actual costs)
• Insurance (professional liability, daily sickness benefits, etc.)
• Accounting/fiduciary fees

Rule of thumb: Anything that is business-related and supported by documentation can be deducted. When in doubt, a tax advisor can help with the assessment.

Do not forget AHV contributions

A point many self-employed individuals overlook: your profit from the sole proprietorship is not only subject to income tax, but also to AHV contributions. AHV contributions are calculated on the basis of your net profit and can be considerable depending on the level of profit.

Tip: Set aside a portion of your profit for AHV contributions from the start (approx. 10% as a rule of thumb). This way you avoid unpleasant back payments. The compensation office typically sends you a provisional contribution invoice, which is adjusted after the final tax assessment.

Deadlines and dates

The most important deadlines for your tax return:

• Submission deadline: In most cantons, the tax return must be submitted by 31 March of the following year.
• Extension: An extension can usually be requested online without difficulty — but plan ahead so you do not end up under time pressure.
• VAT returns: If you are VAT-liable, quarterly returns must be submitted within 60 days after the end of each quarter.

Maintaining your accounting on an ongoing basis ensures that you have all the figures ready when the submission deadline arrives.

Common mistakes in small business tax returns

Many self-employed individuals underestimate the requirements for clean simple accounting.

Typical issues:

• No clear separation of personal and business finances
• Missing or illegible receipts
• Numbers gathered only shortly before the deadline
• Unexpected AHV back payments
• Excel sheets become confusing and error-prone
• Forgetting deductible costs (e.g. home office, continuing education)

Simple accounting can be simple — but it must be traceable. Those who book cleanly throughout the year have no stress at year-end.

Which accounting software is suitable for small sole proprietorships?

Many programs are designed for LLCs or corporations — with double-entry bookkeeping, chart of accounts, and complex financial statements. For sole proprietorships under CHF 500,000 turnover, this is often unnecessarily complicated.

This is exactly why Effizo was developed. Effizo is intentionally simple accounting software for sole proprietorships in Switzerland — essentially a digital milk bookkeeping system.

With Effizo, you can:

• Easily record income and expenses
• Store receipts digitally
• View your current profit anytime
• Export a clean overview for the tax return
• Avoid stress before the deadline

No double-entry bookkeeping. No unnecessary complexity. Just what you really need.

Who is Effizo ideal for?

Effizo is especially suitable for:

• Freelancers
• Consultants
• Craftsmen
• Online self-employed
• Part-time self-employed
• Sole proprietorships with less than CHF 500,000 turnover

So for anyone looking for simple, compliant accounting in Switzerland.

Working with a tax advisor

If you prefer not to complete your tax return yourself, you can engage a tax advisor or fiduciary. The costs for this are, by the way, also deductible as a business expense.

Even if you use a tax advisor, clean accounting remains essential. The better your documents are prepared, the fewer hours the advisor needs — and the more affordable the collaboration becomes. With digital accounting software, you can often give your tax advisor direct access to your data.

Conclusion: Sole proprietorship tax return in Switzerland — simple when the structure is right

For small sole proprietorships, the tax return is much simpler than many think.

With a well-maintained milk bookkeeping system:

• you stay on top of things
• avoid back payments
• save time
• reduce stress

And this is exactly where Effizo supports you — all features at a fixed price. Also read our tips for organising your accounting to stay prepared throughout the year. If you are still using double-entry bookkeeping, take a look at our guide on switching to simple accounting.