Tax Crash Course for Startups: Dates, Deadlines & Obligations

Getting to grips with the Swiss tax system can be a daunting task for newly established startups. With multiple layers of taxation at the federal, cantonal, and municipal levels, each with its own set of rules and regulations, it’s essential to have a clear understanding of your tax obligations.

This comprehensive all-in-one guide aims to equip you with the tools you need to manage your taxes with confidence, highlighting key dates, deadlines and obligations. Whether you’re running your startup as a sole proprietorship or distinct corporate entity, staying compliant and optimizing your tax strategy can significantly impact your financial health and pave the way to long-term success.

Overview of the Swiss tax system

Switzerland’s tax system is known to be very efficient and business-friendly, with more favorable tax rates and rules than in neighboring EU countries. However, it also has its share of complexity, which can be difficult to manage, especially for start-ups and the self-employed. The Swiss tax system is multi-tiered, with taxes levied at federal, cantonal and municipal level. Each level has its own rules and regulations, which can vary greatly within Switzerland.

How does Switzerland’s multi-tiered tax system work?

Switzerland’s tax system is divided into three main levels. Taxes are levied at each of the three levels:

1. Federal taxes: These are levied by the Swiss Confederation at national level and include income tax for natural persons, profit tax for legal entities, value added tax (VAT) and withholding tax.
2. Cantonal taxes: Each of the 26 cantons has its own tax laws, tax rates and regulations. This can make it difficult to keep track of tax obligations in Switzerland. Cantonal taxes include income tax, capital tax and wealth tax.
3. Municipal taxes: These are levied by the municipalities and include income tax and wealth tax. Municipal income taxes are generally calculated as a percentage of cantonal income taxes and are levied together with the cantonal tax. The tax rates can vary greatly from municipality to municipality. In the canton of Geneva, for example, the municipality of Genthod levies an effective municipal tax of 25% of Geneva cantonal tax, while the municipality of Chancy levies 51% of Geneva cantonal tax, more than twice as much.

Why is it important for swiss start-ups to know their tax obligations?

As a young startup in Switzerland, it’s essential to quickly come to grips with the intricacies of the Swiss tax system and learn about the different rules, regulations and specific tax obligations which apply to your startup. Understanding your tax obligations is important for several reasons, including:

• Compliance: Knowing the tax rules and regulations can help ensure your business always remains tax compliant, avoiding penalties and fines by meeting all your tax obligations.
• Financial planning: Understanding the extent of your tax obligations allows for accurate forecasting of your tax liability, which is essential for effective budgeting and financial planning.
• Tax optimization: Gaining deeper insights into tax rules, especially on allowable expense deductions and tax credits, enables you to better optimize your tax situation and minimize your tax liability.

Who must file a tax return in Switzerland?

In principle, every natural person over the age of 18 who has their main residence in Switzerland, and every legal entity, must file a tax return. This includes those who do not have any income. Based on the tax return, the tax administration determines whether the legal person is required to pay income tax and the amount that is owed.

Therefore, all Swiss startups and self-employed individuals living and working in Switzerland must file a tax return.  This includes:

• Sole proprietorships and partnerships: Individuals or groups of individuals who own and operate their business in their own name or who run a business together.
• Corporate entities: Legal entities such as stock corporations (AG) and limited liability companies (GmbH).

Each legal form has specific tax obligations and filing requirements, especially when comparing sole proprietorships (not separate legal entities) and corporate entities (distinct legal entities).

What types of taxes apply to startups?

Startups in Switzerland are subject to several types of taxes, which depend primarily on the legal form of the startup and the canton in which it operates. Here, we will briefly outline some of the key types of taxes to keep in mind, and we will explore them in more detail later.

Income tax

Income tax (often referred to as “profit tax” when dealing with corporate entities) is levied at all three levels in Switzerland (Federal, Cantonal, and Municipal) on the profits generated by a business. In the case of a sole proprietorship, the startup profits are treated as personal income for tax purposes. The taxation rates and rules vary according to the legal form of the startup and canton in which it operates, which we will explore in more detail later.

Capital tax

Capital tax is the second major tax on businesses in Switzerland. It is a tax imposed as a percentage of the net equity value of a company. Capital tax is only levied at the cantonal and municipal levels, not at the federal level. The rate varies across cantons, with some also stipulating a flat minimum capital tax (more details on this later).  Capital tax only applies to corporate entities, not sole proprietorships and self-employed individuals.

Value added tax (VAT)

Value Added Tax (VAT) is a sales tax that is applied to the value added to goods and services at each stage of their production and distribution. It is a type of consumption tax that is applied as a percentage of the final price paid by the consumer. All Swiss startups (including sole proprietorships) with an annual taxable turnover exceeding CHF 100,000 must register for VAT in Switzerland.

Withholding tax

The Withholding tax is a tax that is deducted directly from the source of income. In Switzerland, it is applied to wages, pensions, and other earnings of individuals who work or earn income in Switzerland but are not permanent residents. The employer or the paying entity withholds the tax and remits it to the tax authorities.

Anticipatory tax

A flat rate of 35% is levied on certain types of income, such as dividends, interest, and royalties, in Switzerland. This tax is withheld at the source, meaning the paying entity deducts the tax before the recipient receives the income. This applies to both domestic and foreign recipients.

In many cases, the recipient can claim a partial or full credit for the withheld tax, depending on their country of residence and the applicable double taxation agreements between that country and Switzerland.

The purpose of the anticipatory tax is to ensure compliance with tax regulations by deducting the tax directly from the income at the source. Recipients can reclaim the tax later if applicable. Start-ups may also be subject to anticipatory tax if they receive income distributions from foreign sources. Additionally, they must be aware of the withholding tax they need to impose on their own dividend and royalty distributions.

This mechanism helps ensure tax compliance and prevents tax evasion through the immediate withholding of tax at the source.

Wealth tax

Wealth tax in Switzerland is a tax levied at the cantonal and municipal levels on the net wealth of individuals. This includes both Swiss residents and non-residents who own property in Switzerland. While wealth tax is applied to individual persons and not directly to businesses, it’s an important tax for sole proprietors and self-employed entrepreneurs to consider.

As there is no legal distinction between personal and business assets of the owner of a sole proprietorship, so-called “business assets” are considered part of the owner’s personal net worth and may therefore be subject to wealth tax in the owner’s canton of residence.

Other taxes

Additionally, startup founders must learn about the various other types of taxes which may apply to their business or personal situation. Some examples include:

• Capital gains tax: Levied on the profit from the sale of business assets.
• Stamp duties: Applied to the issuance and trading of securities and certain insurance policies.
• Various cantonal and municipal taxes, such as: church tax, vehicle tax, transfer tax, inheritance and gift tax, etc.

What are the differences in tax treatment for sole proprietorships and corporate entities?

So far, we have given a brief overview of the Swiss tax system and outlined some of the main types of taxes that startups and self-employed entrepreneurs should understand. We will now explore, in more detail, various aspects and rules of taxation applying to startups in Switzerland, highlighting key differences between the tax treatment of sole proprietorships and corporate entities.

Tax registration process

Do you have to register your business for tax purposes?

If you wish to establish a corporate entity in Switzerland, such as an AG or GmbH, you need to undergo the company registration process and be entered into the Commercial Register of the canton in which your business operates. As part of the legal company registration process, your startup will also automatically be registered as a corporate income taxpayer and receive a unique tax number. As such, the company is legally obligated to file annual tax returns and pay the corresponding federal and cantonal taxes owed.

While sole proprietorships are not defined as separate legal entities from their owners, entry into the commercial register is still usually required for those who generate a gross income of at least CHF 100,000 per year. Furthermore, those who carry out their self-employed or business activities in a canton or municipality outside of their place of residence must register for self-employment in the canton in which the business operations occur. This will then result in an inter-cantonal tax allocation, which we discuss in more detail below.

Additionally, both sole proprietorships and corporate entities with an annual taxable turnover in excess of CHF 100,000 are required to register for and charge VAT on their sales.

Registration deadlines

Companies and sole proprietors who meet the criteria for compulsory VAT registration must register online no later than 30 days after the commencement of their tax liability. VAT returns must be filed within 60 days of the end of the taxable period. A “zero declarations” must be submitted if there are no reportable transactions during the respective tax period.

Income tax for sole proprietors

As there is no legal distinction between a sole proprietorship and its owner, sole proprietors must report their business income on their personal tax returns. The income is subject to both federal and cantonal income taxes.

What is the difference between cantonal and federal income tax?

Switzerland has a multi-tiered tax system, with income tax being levied at both the federal and cantonal levels.

1. Federal income tax: The federal government imposes a progressive personal income tax, with rates ranging up to 11.5% on the taxable income.
2. Cantonal and municipal income tax: Each canton and municipality set its own tax rates, which can vary significantly. Cantonal and municipal taxes are also progressive and are added to the federal tax to determine the total income tax liability.

Where must the income be declared?

Where are sole proprietors who operate their business in a different canton from their canton of residence obliged to file their tax return? In most cases, it is the canton in which the income is earned that determines where the taxes should be filed and paid, hence the canton in which the business operates.

If a sole proprietor generates personal income in their own canton of residence but operates their business in another canton, inter-cantonal tax apportionment may be required. I.e., cantonal income tax may be divided between different cantons in accordance with the proportion earned in each.

How is income tax calculated?

Income tax for sole proprietors is calculated based on the net profit of the business. This is made up of:

1. Gross income: All revenues generated by the business.
2. Deductions: Business expenses, such as office rent, supplies, travel expenses, and employee salaries. These expenses are subtracted from the gross income to determine the net profit.

The net profit is then added to any other personal income the sole proprietor has (such as wages, rental income, etc.), and the total is taxed according to the progressive tax rates. The progressive tax rates at both the federal and cantonal levels applying to sole proprietors are determined by their total income, inclusive of both personal and business income.

What tax deductions can sole proprietors and the self-employed claim?

Sole proprietors and self-employed individuals can take advantage of various deductions to reduce their taxable income. These may include:

• Business expenses: All necessary expenses incurred in the operation of a sole proprietor’s business activities can be deducted from taxable income.
• Depreciation: Amortization of business assets may also be deducted as a business expense for tax purposes.
• Self-employment social security contributions: Sole proprietors may be able to claim tax deductions for payments made to the Swiss social security system (AHV/IV/EO). We will explore this in more detail in a later section on social security contributions.

Only expenses incurred in the operation of the business or self-employment activity may be deducted for tax purposes. This can make handling tax deductions as a sole proprietor very complex, especially when expenses cannot be clearly allocated to private or business use. However, if handled carefully with the right expertise, there is significant scope for legitimate tax optimization.

What about expenses which can be both private and business?

The tax laws governing how to allocate expenses which can be viewed as both for personal and business use are extensive, and we will not go through all the particulars in this article. However, here we can outline some key expense deductions for sole proprietors and how they are typically dealt with:

• Rent / office space: Deductions can be claimed for a portion of home rent or mortgage interest if a part of the home is used exclusively as a business office. This portion should be based on the percentage of space used for business purposes. If you are the owner of the property, you may apply a realistic “imputed rental value” and thereby deduct the portion which is for business rent.  
• Vehicle expenses: Many self-employed entrepreneurs and sole proprietorship owners use one vehicle for both business and private purposes. As such, tax deductions for vehicle expenses can be claimed based on the percentage of business use. This may include fuel, maintenance, and insurance costs.

There are two main methods for calculating the private and business use: either by means of a logbook (often more time-consuming), or by applying a flat rate for the private portion (simpler approach). The particular rules and guidelines on these calculations can be quite complex, and we won’t go into them here. For a more in-depth explanation, read our article about the choice between a company car and a private car.  

• Travel expenses: Expenses related to business travel, such as transportation, lodging, and meals, can often be deducted. However, the rules governing which expenses can be deducted and up to what amount varies widely across the different cantons. It is important to keep detailed records and receipts to justify the expenses. If you can provide credible evidence of the expenses, it may be possible to replace the annual filing of receipts with a flat rate or other type of expense regulation approved by the specific cantonal tax authorities.
• Workwear: The cost of specialized clothing required for business activities, which is not suitable for everyday wear, can be deducted. However, clothes which could also be used for personal wear do not qualify for tax deduction (e.g., a suit and tie)
• Ongoing training and education: Costs for courses and training related to the startup business that help improve skills or knowledge can generally always be deducted. This must be relevant to your business operations, and courses taken purely for personal interest do not qualify for tax deduction.
• Insurance: Premiums for business-related insurance, such as liability or professional indemnity insurance, are typically deductible. Personal home insurance and private liability insurance, on the other hand, cannot be deducted.
• Other general expenses: Costs for utilities like phone, electricity, and internet can be deducted based on the proportion of business use.

How do you distinguish between business and private assets?

While there is no legal distinction between business and private assets of a sole proprietor, as all are deemed to be under the personal ownership of the owner, they must still be clearly separated when it comes to calculating tax liability.

There are two main tax areas where this distinction becomes necessary:

1. Depreciation and provisions: both depreciation and provisions may only be made on business assets, not private.
2. Capital gains tax: In Switzerland, capital gains on the sale of private assets are tax-free. However, capital gains on business assets are taxed as income at the federal level and in all cantons.

The tax authorities recognize a sole proprietor’s assets as falling into one of the following three categories:

1. Clear and necessary business assets
2. Definite private assets
3. Assets which may be both business and private assets due to their nature or use (e.g., car, computer, home office space, mobile phone, furniture)

In the case of the latter where assets are used both privately and commercially, the assets are still allocated either entirely to private assets or to business assets. The allocation depends on the predominant use of the asset (preponderance method). This contrasts with the treatment of expenses which may be apportioned to both private and business expenses in proportion to their respective usage.

Tax filing requirements

While profits generated from a sole proprietorship are taxed in the same way as personal income, the owner must still either keep full commercial accounts or at least submit a detailed profit and loss statement along with their personal tax return. This statement should include all income and expenses related to the business. The deadline for filing the tax return varies by canton, but it is generally due by March 31st of the following year.

Corporate income and capital taxes for startups

Founders who formally incorporate their startup as a corporate entity in Switzerland, such as an AG or GmbH, need to understand the various corporate taxes which apply:

Profit tax

Corporate entities in Switzerland are subject to corporate income tax on their profits. The federal tax rate is a flat 8.5% on profit after tax, which translates to an effective tax rate of around 7.8% on profit before tax. The cantonal and municipal profit tax rates vary significantly, so corporate entities can expect an overall corporate income tax rate on profit before tax of anywhere between 11.9 % and 21% including federal, cantonal, and municipal taxes.

Capital tax

Capital tax is levied on the net equity of the company at the cantonal level only. The rates vary between cantons and range from 0.001% to 0.5%. This tax is assessed annually based on the company’s equity as recorded in its financial statements.

Flat Minimum Taxes Imposed by Some Cantons

In addition to their standard capital and profit tax rates, many cantons also impose a flat minimum tax which is applied irrespective of a company’s capital value and/or income. There are two types of minimum taxes: a minimum tax on capital only and a general minimum tax on the total of both profit tax and capital tax.

Read our article: Comparison of minimum capital tax rates for companies in all 26 cantons to learn more on this topic.

Personal income tax on dividends received by shareholders/owners

Founders of startups which are incorporated as legal entities need to know that, in addition to the corporate taxes the company itself is liable for, as shareholders they too are liable to pay personal income tax on any profit distributions received from the company, such as dividends and royalties. This effectively creates a situation of double taxation, whereby the profits generated by the company are taxed twice: firstly, at the corporate level, and secondly at the individual/personal level when they are distributed.

There are ways to optimize payouts to shareholders to minimize this double-tax burden. One legitimate method is to strike the optimal balance between salary payouts and dividend distributions to owners. Salaries are defined as a company expense which can be deducted from taxable income, and thereby only taxed once as personal income for the owner. However, this itself raises many important issues and considerations, as salary payouts need to be within reasonable limits to not be deemed as an attempt at tax evasion. Additionally, while salary payouts are more tax efficient for the startup itself, they are generally less tax-efficient for the recipient because they come with compulsory social insurance contributions and are fully taxable as opposed to dividends which qualify for partial taxation at the personal level.

Read our article for a more in-depth comparison between salary or dividends for the owner of a company.

What are the key tax dates and deadlines startups need to know?

Tax filing deadlines in Switzerland vary by canton and differ for natural persons and legal corporate entities. Here are some common dates and deadlines to keep in mind:

• Tax year: The standard Swiss tax year runs from 1^st January to 31^st December.
• Annual individual tax return: For natural persons, which includes self-employed entrepreneurs and sole proprietorships, the filing deadline for the respective tax return is 31^st March of the following year in most cantons. Filing extensions are often granted up to September or November upon request by the taxpayer.
• Annual corporate tax returns: For corporate entities, the tax year is the business year, which equates to the company’s applicable accounting period and may therefore end on any date within a calendar year. The filing deadlines again vary by canton but are usually between six and nine months after the end of the business year. Companies may request a filing extension of up to 12 months from the end of the business year.
• Companies are initially assessed for taxation on a provisional basis, and the final assessment is only issued either after the tax base has been subjected to a tax audit or has been declared final by the tax authorities.

VAT obligations

Who must register for VAT in Switzerland?

Every startup in Switzerland, whether a legal entity or a sole proprietorship, is required to register for VAT and remit it if it achieves a total annual turnover of at least CHF 100,000 from taxable supplies. This also applies to self-employed persons, who are liable to pay VAT if their annual income from self-employment exceeds the CHF 100,000 threshold.

Voluntary VAT registration

Swiss startups with an annual turnover below the threshold can also decide to voluntarily register for VAT. This can be beneficial, because businesses who register for VAT can claim input tax deductions and therefore recover VAT paid on their purchases. This could have a net positive effect for some startups depending on their specific situation.

What are the applicable VAT rates?

Switzerland has three VAT rates:

• Standard rate: 8.1% for most goods and services.
• Reduced rate: 2.6% for essentials such as basic food items, books, and newspapers.
• Special rate: 3.8% for accommodation services.

Additionally, some goods and services are exempt from VAT. These include certain healthcare, educational, and social care services, some unprocessed agricultural goods, and certain exports and international services.

VAT filing and payment frequency

VAT returns must be filed quarterly, with payment due within 60 days of the end of the quarter. Smaller businesses with a lower turnover may be eligible to opt for annual filing if they meet certain criteria.

Input tax deductions

Input tax deductions allow businesses to deduct the VAT they have paid on purchases from the VAT they have collected on sales when calculating their final VAT liability to the tax authorities. This allows them to recover the VAT they have paid to their suppliers, and therefore only hand over the net VAT they have collected.

All businesses that are registered for VAT in Switzerland can claim input tax deductions. To claim these deductions, they must have valid VAT invoices or other supporting documents for their purchases.

For startups who are sole proprietorships or self-employed persons, only VAT paid on goods and services used for business purposes is eligible for deduction. VAT incurred on personal or non-business expenses is not deductible. For these expenses to qualify as deductible for input VAT purposes, both the company providing the goods and services, as well as the one purchasing, should be registered for VAT in Switzerland.

For more information on input tax deductions, read our article: Input tax in Switzerland: What can be claimed?

Social security contributions

Anyone who lives and works in Switzerland is required to contribute to mandatory social insurance. Social security contributions in Switzerland include:

• AHV/IV/EO: these are the three basic social security protections of old age and survivor’s insurance (AHV), disability insurance (IV), and loss of earnings compensation (EO).
• ALV: unemployment insurance
• FAK: family allowance benefits
• BVG: Occupational pension fund mandatory for employees earning more than CHF 22,050 per year, optional for self-employed persons.

The rules regarding social security contributions and the corresponding tax deductions differ depending on whether your startup is a corporate entity or sole proprietorship (the latter means that you are categorized as a self-employed individual for the purposes of social security and tax rules). The specific regulations can be quite complex, but we will break down the essential points simply:

Corporate entities

If you establish a startup as a GmbH, AG, or other type of corporate entity, and go on to hire employees, the mandatory social security contributions will be split equally between the employees and your company (as the employer). The employer contributions made by the startup form part of the overall remuneration to employees and are hence tax-deductible as part of your operational expenses.

Sole proprietorships

If you operate your startup as a sole proprietorship (i.e., as a self-employed entrepreneur) navigating social security can be more complicated.

1^st Pillar

As a sole proprietor, it is also mandatory to make AHV/IV/EO contributions (1^st Pillar). The combined contribution rate comes to approximately 10.6%, and you must pay both the employer and employee portions of the contribution. The contributions are tax deductible.

2^nd Pillar

Additionally, you may voluntarily join a 2^nd pillar pension fund (BVG) and deduct the contributions paid into the pension fund from your taxable income up to a maximum of 25% of your AHV annual salary. These contributions are seen as 50% private expenses, while the other 50% can be recorded on your business income statement.

3^rd Pillar

Finally, you can also opt to contribute a portion of your earnings into Pillar 3a each year tax-free. If you decide to voluntarily join a Pillar 2 pension fund, you may only contribute a maximum of CHF 7,056 tax-free to Pillar 3a. Otherwise, if you do not voluntarily contribute to a Pillar 2 pension fund, you may pay as much as 20 percent of your net earned income, up to a maximum of CHF 35,280 tax-free into Pillar 3a each year.

Verdict

Determining which route is most tax-efficient and optimal for you as a self-employed startup owner depends entirely on your individual circumstances, preferences and financial standing. It is advised to work closely with an expert trustee who can help lay out the different options available and determine which is most beneficial and practical for your given situation.

Accounting and filing requirements

The Swiss Code of Obligations (CO) requires all businesses to maintain proper accounting records, which are needed when it comes time to file tax returns. The specific requirements depend on the legal structure and size of the business:

• Corporations and larger entities: Full commercial accounting records are required, which include double-entry bookkeeping and complete annual financial statements.  Larger corporations, as well as all public companies, are required to undergo an annual ordinary audit by an external auditor. These records and audit reports form the basis of the company’s tax declaration.
• Sole proprietorships and small partnerships: Self-employed entrepreneurs whose startup’s revenue doesn’t exceed CHF 500,000 for the financial year are only required to maintain simplified accounting records which include a profit and loss statement and records of assets and liabilities. These records must be attached to the tax return for the relevant year.

For a detailed breakdown of accounting requirements and regulations in Switzerland for GmbHs and other types of businesses, read our article: Special features of accounting for a GmbH.

What are some common tax mistakes and how do you avoid them?

The complexity of the Swiss tax system, and the multitude of rules and requirements for startups to keep track of can easily lead to mistakes and missed opportunities if entrepreneurs aren’t careful.

Failure to register for VAT

One common mistake is failing to register for VAT when required, either willfully or simply due to oversight. The Swiss Federal Tax Administration (FTA) may impose penalties if your startup is liable for VAT in Switzerland but does not comply with the tax obligation. Negligent non-declaration can result in fines of CHF 10,000 to CHF 400,000, whereas the FTA can impose a fine of up to twice the amount of the tax obligation in the case of intentional non-declaration.

Ensure you carefully monitor your turnover and register promptly when you exceed the threshold for VAT registration.

Missed deadlines

We have mentioned some of the key dates and deadlines for tax filing and payment. Missing these deadlines can lead to penalties and interest charges. Keep track of all key dates and set reminders to ensure timely compliance. Entrusting your tax returns to a professional trustee can completely avoid this trouble, as it is your trustee’s job to ensure your tax returns are submitted well within the filing deadline.

Calculation errors

Errors in tax calculations can lead to underpayment or overpayment of taxes. Depending on the severity of the error, there may also be significant penalties and even legal consequences. Using reliable accounting software or seeking professional fiduciary help can mitigate this risk.

Overlooked opportunities for tax deductions

Staying tax-compliant by submitting and paying your taxes on time is only a small part of what it takes to truly master your startup’s tax position. Many startups fail to take advantage of the numerous opportunities for tax deductions and optimization. This can be a major opportunity cost for your startup and can result in paying much higher taxes than you ought to. Familiarize yourself with the deductions allowed under Swiss tax law and the various ways to optimize your tax position. It’s always best to work closely with a trusted tax advisor to ensure you maximize your tax savings.

The importance of tax planning

Careful tax planning is essential for ensuring compliance, avoiding mistakes, and minimizing your tax liability. By gaining a deeper understanding of your tax obligations and implementing some straightforward strategies with the support of a tax expert, you can optimize your startup’s tax situation and avoid unexpected liabilities.

Strategien zur rechtlichen Optimierung Ihrer Steuerlast

Some of the key strategies and approaches to optimize your tax situation and minimize your tax liability include:

• Utilize deductions: If you are a self-employed entrepreneur, be sure to claim all eligible business expenses, such as office supplies, travel, and utilities. Proper documentation and categorization of these expenses can significantly reduce your taxable income.
• Plan capital expenditures: Timing capital expenditures, such as purchasing equipment or upgrading technology, can impact your tax liability. Investing in assets before the end of the fiscal year can increase deductible expenses, lowering your taxable income for that year.
• Structure your business correctly: The legal structure of your startup (e.g., sole proprietorship, partnership, GmbH, AG) can have one of the most significant impacts on your overall tax burden. Do careful research and work closely with your tax advisor to choose the most tax-efficient business structure for your situation.
• Optimize salary and dividends: For owners of a GmbH or AG, finding the correct balance between salary and dividend payments can greatly reduce your overall tax burden. Your tax advisor can help you manage this while staying compliant with Swiss tax law.
• Defer income: If possible and appropriate, defer income to the following tax year, particularly if you anticipate being in a lower tax bracket. This can reduce your current year’s taxable income.

Should you seek professional guidance?

Given the complexity of the Swiss tax system and the significant scope for improving your startup’s tax efficiency,a professional trustee can provide invaluable guidance and support. The right tax advisor can help you streamline your tax filing process, optimize your tax position, and ensure compliance with all legal requirements in Switzerland. While you may be tempted to handle your own tax returns to save on the fees of hiring a tax consultant, keep in mind that a good trustee pays for themselves many times over in respect of the additional tax savings they help you secure, not to mention all the other numerous benefits they provide.

For a deeper exploration on whether it makes more sense to do your own tax returns or hire an expert, read our article on the topic.