Private-use portions
Mistake 5: Not recording goods withdrawn and own consumption
Income from self-employment also includes withdrawals in kind from your own business. If you take goods, products or services for private use, these withdrawals must be credited correctly and must not disappear unnoticed in expenses or inventory.1,2
This is particularly relevant in hospitality, retail, skilled trades or businesses with their own material consumption. The closer business and private life are to each other, the more consistent the separation must be.
Mistake 6: Forgetting private-use portions of mixed costs
The ESTV requires a separation if private shares of heating, electricity, cleaning, telephone, internet or similar costs were charged to the business. The same applies to private shares of wages and other business costs incurred for mixed reasons.1,2
What to watch out for: Define a clear method for recurring mixed costs and apply it consistently. Without a documented method, private-use portions quickly look arbitrary.
Mistake 7: Posting your own pension contributions incorrectly in the income statement
For your own contributions to occupational pension provision, only the employer’s share may be included in the income statement. The remaining private share and all contributions to pillar 3a do not belong in the income statement but in the corresponding deduction items of the tax return.1,2
This is a classic double mistake: on the one hand, too much expense is recorded in the accounts; on the other, the same amount is treated incorrectly a second time in the tax return.
Mistake 8: Not documenting private withdrawals and private contributions properly
With simplified bookkeeping, the ESTV questionnaire explicitly requires statements of private withdrawals and private contributions. If you do not record private contributions to finance the business or private withdrawals from the cash register separately, you make the derivation of the result unnecessarily unclear.1,2
What to watch out for: Always separate money movements between private and business deliberately and promptly. This also makes it easier later to assess liquidity, equity and tax-relevant expenses.
Vehicles and expenses
Mistake 9: Recording vehicle costs without a private-use portion or without a mileage basis
For car costs, questionnaire 15a provides separate fields for make, year of manufacture, list price, kilometers driven, private kilometers, ongoing vehicle costs and depreciation. If you use a vehicle for both business and private purposes, you therefore need a traceable method for the private-use portion and should document the use properly.1,2
In practice, a logbook is not always mandatory, but it is often the strongest way to separate business and private use plausibly. The higher the vehicle costs, the more important the documentation becomes.
Mistake 10: Posting expenses without proof of purpose
Expenses only hold up if you can document the business purpose, date, amount and receipt in a traceable way. Card payments or account debits alone, without supporting documents, are often not enough to prove the business connection properly.1,2,4
Typical problem areas are meals, travel expenses, client appointments, small materials and online purchases. The thinner the documentation, the more likely a business expense becomes a private expense in the tax assessment.
Accruals
Mistake 11: Taking only incoming and outgoing payments into account
The ESTV questionnaire for simplified bookkeeping explicitly asks about customer receivables, work in progress, inventories of goods and materials, and liabilities for goods and materials at the beginning and end of the year. VAT is also taken into account separately in the form for turnover and cost of goods. If you work only from the bank account, you distort turnover, expenses and therefore taxable income.2
What to watch out for: At year-end, always check open invoices, work not yet invoiced, inventories, supplier liabilities and the VAT logic. This is precisely where silent mistakes arise, even though ongoing accounting looks clean at first glance.
Mistake 12: Treating business assets, depreciation and loss carryforwards incorrectly
Business assets comprise assets that serve self-employment wholly or mainly. Capital gains on business assets are taxable. Assets used for mixed purposes can be allocated to business assets if they are mainly used for business. Losses from the seven preceding financial years are deductible only within the legal framework, insofar as they have not yet been taken into account.1
For depreciation, the loss in value due to use and age is also the yardstick. If you allocate assets incorrectly, treat sales inaccurately or carry over old losses without proper evidence, you risk a materially incorrect tax return.2,6
Checklist before submitting
- Are the annual financial statements or simplified statements complete, and do they match the tax return?1,2
- Are private withdrawals, private contributions, withdrawals in kind and private-use portions properly recorded?1,2
- Are car, expense, telephone and similar mixed costs documented in a traceable way?1,2,4
- Are investments separated from ongoing business expenses, and is depreciation plausibly justified?1,2,6
- Are outstanding receivables, work in progress, inventories, liabilities and VAT correctly accrued at year-end?2
- Have you checked the cantonal guidance notes for cantonal specifics regarding deductions and filing?5
Especially with mixed-use costs, vehicles and closing entries, a final check before submitting is worthwhile. The more accounting and tax return follow the same logic, the more robust your declaration.1,2,5
Important questions about tax mistakes made by Swiss entrepreneurs
As a self-employed person, do I always have to keep double-entry accounts?
No. For smaller sole proprietorships, simplified bookkeeping is sufficient under certain conditions.
For the tax return, however, you must always submit reliable documents: either annual financial statements or, with simplified bookkeeping, statements of assets, liabilities, income, expenses, private withdrawals and private contributions.1,2,3
How long do I have to keep receipts?
Receipts and documents relating to self-employment must be kept for 10 years.
This may also be done electronically, provided the documents can be assigned to the business transaction and are readable at any time.1,2,4
May I declare private costs as business expenses?
No. Private expenses and private shares of mixed-use costs are not deductible.
This applies, among other things, to private insurance, household costs and private shares of car, telephone and similar business costs.1,2
How do I treat vehicle costs in the tax return?
For vehicles used for both business and private purposes, you must document the costs properly and separate out the private-use portion correctly.
The ESTV questionnaire provides separate fields for this, including vehicle details, kilometers and car costs.1,2
Where do pillar 3a and my own BVG contributions belong?
Contributions to pillar 3a do not belong in the income statement.
For your own BVG contributions, only the employer’s share is allowed as a business expense; the remaining part is taken into account separately in the tax return.1,2
