Swiss Accounting Requirements: OR, GAAP FER & Audit

Swiss accounting requirements are set out in Articles 957 to 963b of the Code of Obligations (Obligationenrecht, OR). Every company incorporated in Switzerland — AG, GmbH, cooperative, or branch — must comply with these minimum standards. The applicable standard, audit tier, and record-keeping burden then depend on size and structure. This guide explains what applies to whom, where the thresholds sit, and what the consequences are for getting it wrong.

---

Five Accounting Mistakes That Trigger Swiss Tax Audits

Before getting into the legal framework, here are the five errors we see most frequently at Goldblum und Partner AG across 300+ client companies — and each one can trigger a cantonal tax authority review:

1. Skipping annual filings for dormant companies. A dormant holding company with zero turnover still needs annual financial statements and a corporate tax return. Skip two years and the cantonal authority issues estimated assessments — typically overstated — plus 3% annual interest. Annual maintenance cost: approximately CHF 1’400. Catch-up cost after three missed years: CHF 8’000-12’000.

2. Crossing the CHF 100’000 VAT threshold without registering. The threshold captures worldwide taxable turnover, not just Swiss revenue. A company generating EUR 80’000 in Germany and CHF 30’000 in Switzerland is already over the line. The ESTV can impose retroactive VAT liability with interest and penalties.

3. Running the company without its own bank account. If the company has no dedicated Swiss bank account and routes payments through a shareholder’s personal account or a foreign parent’s account, Swiss regulators view the operations as questionable. Banks will also refuse to open accounts for companies that cannot produce current annual statements.

4. Ignoring intercompany pricing. Management fees, royalties, and intragroup loans that deviate from market rates are treated as hidden profit distributions — subject to 35% withholding tax. The ESTV does not need to prove intent; deviation from arm’s length is sufficient.

5. Letting the accounting backlog grow. The single most common compliance failure. Each unfiled year makes the next year harder and more expensive to reconstruct. Year one of catch-up: CHF 3’000-4’000. Year three of catch-up: CHF 10’000+ and rising, because sequential reconstruction means you cannot fix 2025 without first closing 2024.

From practice: A dormant holding company’s founder assumed zero-turnover meant zero filings. The cantonal tax office disagreed — CHF 2’000 in penalties, plus CHF 1’200 in accrued interest, plus the cost of reconstructing three years of nil accounts. Total bill: CHF 7’400. The annual cost of proper maintenance would have been CHF 1’400 per year — CHF 4’200 over the same three years.

---

Legal Basis: Articles 957–963b OR

Swiss accounting obligations are codified in Articles 957 to 963b of the Code of Obligations. These provisions were substantially revised in 2013 — the most significant overhaul in decades — and have been refined further since. The revision consolidated bookkeeping requirements across all legal forms, introduced clearer thresholds for simplified versus full double-entry accounting, and aligned audit obligations with company size in a more systematic way.

Art. 957 OR establishes the general duty to keep accounts. Art. 958 OR requires that the accounts give a true and fair view of the company’s financial position. Art. 958f OR fixes the 10-year retention period. Art. 959a OR specifies mandatory balance sheet content. Arts. 962–963b OR govern the obligation to prepare consolidated financial statements for groups.

The OR sets the floor. Every Swiss company must meet its requirements. The question for any given company is whether additional standards apply on top.

---

Who Must Keep Accounts

The duty to maintain accounting records applies to all companies registered in Switzerland, regardless of size or legal form. This includes:

• Aktiengesellschaft (AG) — joint-stock companies
• Gesellschaft mit beschränkter Haftung (GmbH) — limited liability companies
• Cooperatives (Genossenschaft)
• Swiss branches of foreign companies
• Sole traders and partnerships with annual revenue above CHF 500’000

The trigger for sole traders and partnerships (Kollektivgesellschaft, Kommanditgesellschaft) is a rolling revenue threshold of CHF 500’000 per year. Below that figure, a simplified form of record-keeping applies under Art. 957 para. 2 OR. Above it, the full double-entry obligation kicks in.

For an overview of the main Swiss company structures and their obligations, see our guide on company formation in Switzerland.

---

Simplified vs. Double-Entry Bookkeeping

Simplified Bookkeeping (Vereinfachte Buchführung)

Sole traders and partnerships whose annual revenue falls below CHF 500’000 are not required to maintain double-entry accounts under Art. 957 para. 2 OR. They must instead keep:

• An income and expenditure account (Einnahmen- und Ausgabenrechnung)
• A record of assets and liabilities (Vermögensrechnung)

No formal balance sheet, no profit and loss statement in the OR sense. This significantly reduces the administrative burden for small operators, but it also limits access to certain financing structures and creates practical complications if revenue trends upward toward the threshold.

Double-Entry Bookkeeping (Doppelte Buchhaltung)

Required under Art. 957 para. 1 OR for:

• All AG and GmbH, regardless of size
• All cooperatives
• Sole traders and partnerships with revenue above CHF 500’000

Double-entry bookkeeping under the OR requires, at minimum, a balance sheet and an income statement (profit and loss account). Notes to the accounts are also required where they are necessary to give a true picture of the company’s financial position (Art. 959c OR). For practical support setting up compliant accounts, see our bookkeeping Switzerland service.

---

The Financial Year

The default financial year in Switzerland runs from 1 January to 31 December. Companies may adopt a different fiscal year — for instance, ending 31 March or 30 June — if this is specified in the articles of association (Statuten). Changing the financial year after incorporation is possible but requires a formal resolution and registration with the Commercial Register. There is no restriction on the length of the first financial year; it can exceed twelve months where necessary to align with a chosen year-end.

---

Accounting Standards: OR, Swiss GAAP FER, and IFRS

Switzerland does not impose a single mandatory reporting standard beyond the OR minimum. The applicable standard depends on company size and circumstances.

OR (Minimum Standard)

The OR prescribes minimum content for the balance sheet and income statement but does not mandate a specific format or chart of accounts. Companies are free to choose their presentation, provided the mandatory line items are present and the accounts give a true and fair view (Art. 958 OR). This makes OR-only accounts relatively flexible — and, in practice, relatively opaque for outside readers.

Swiss GAAP FER

Swiss GAAP FER (Fachempfehlungen zur Rechnungslegung) is the preferred reporting standard for mid-size Swiss companies. It covers all recognition, measurement, and disclosure questions not resolved by the OR, and produces financial statements that are considerably more informative and comparable than bare OR accounts.

Swiss GAAP FER is widely used by companies seeking third-party financing, preparing for a capital markets transaction, or operating in sectors where lenders or investors demand more than the statutory minimum. It is less expensive and less complex to implement than IFRS, while still meeting the needs of most sophisticated counterparties in the Swiss market.

IFRS

International Financial Reporting Standards are mandatory for companies listed on SIX Swiss Exchange. For unlisted companies, IFRS is optional. Given the cost and complexity of IFRS implementation — specialist staff, extensive disclosures, fair-value accounting — most private Swiss companies have no practical reason to adopt it. Those that do typically have international parent companies or specific investor requirements.

IFRS for SMEs

A simplified version of IFRS designed for non-listed entities. Adoption in Switzerland is minimal. Swiss GAAP FER is almost universally preferred for companies that want a more rigorous standard than the OR minimum without the full cost of IFRS.

---

Mandatory Balance Sheet Content (Art. 959a OR)

The OR specifies what must appear on the face of the balance sheet. On the asset side:

• Current assets: cash, receivables, inventories, prepayments
• Fixed assets: tangible assets, financial assets
• Intangible assets

On the liability and equity side:

• Current liabilities: trade payables, short-term debt, accruals
• Long-term liabilities: long-term debt, deferred taxes, provisions
• Equity: share capital (Aktienkapital / Stammkapital), statutory capital reserve, statutory retained earnings, other reserves, retained earnings or accumulated losses

The minimum share capital for an AG is CHF 100’000 (at least CHF 50’000 must be paid in). For a GmbH, the minimum is CHF 20’000, fully paid in. These figures appear as fixed line items in the equity section and are not subject to reclassification.

---

Audit Requirements

Swiss law divides the audit obligation into three tiers under Arts. 727–731 OR. Which tier applies depends on company size, measured against three thresholds.

Audit Threshold Table

Audit Type	Revenue	Balance Sheet Total	Full-Time Employees	Condition
Ordinary Audit (Ordentliche Revision)	> CHF 40M	> CHF 20M	> 250 FTE	Exceeds 2 of 3 thresholds
Limited Audit (Eingeschränkte Revision)	All others	All others	All others	Default for AG/GmbH not qualifying for opting-out
No Audit (Opting-out)	Any	Any	< 10 FTE	All shareholders consent in writing

Ordinary Audit

Companies exceeding two of the three thresholds — CHF 40M revenue, CHF 20M balance sheet total, 250 full-time employees — must undergo an ordinary audit (ordentliche Revision) under Art. 727 OR. This is a full statutory audit conducted by a licensed audit firm (Revisionsunternehmen) registered with the Federal Audit Oversight Authority (RAB). The auditor issues an opinion on whether the financial statements comply with applicable accounting standards and whether a reliable internal control system exists.

Limited Audit

All AG and GmbH that do not meet the ordinary audit thresholds — and have not opted out — must undergo a limited audit (eingeschränkte Revision) under Art. 727a OR. A limited audit is substantially lighter: the auditor performs enquiries and analytical procedures but does not obtain sufficient evidence for a positive opinion. The result is a negative assurance statement: nothing has come to the auditor’s attention that causes them to believe the accounts are not in accordance with the law and the articles. A licensed audit expert (Revisionsexperte) or audit specialist (Revisor) registered with the RAB must conduct the engagement. For detailed guidance, see our audit Switzerland overview.

Opting-Out

AG and GmbH with fewer than 10 full-time employees may dispense with even the limited audit entirely, provided all shareholders agree in writing under Art. 727a para. 2 OR. This is known as opting-out (Verzicht auf eingeschränkte Revision). It is a practical option for owner-managed companies and small subsidiaries where the shareholders are fully informed of the company’s affairs and see no benefit in external audit. The decision must be documented and the Commercial Register notified.

---

Record Retention

All accounting records — books of account, vouchers, correspondence, and supporting documents — must be retained for 10 years from the end of the financial year to which they relate (Art. 958f OR). This applies equally to paper and electronic records. Electronic retention is permitted provided the records remain legible and retrievable throughout the retention period. Destruction before the 10-year deadline exposes directors to personal liability and can create serious complications in the event of a tax audit or dispute.

The Swiss Federal Tax Administration (ESTV) can demand production of records at any time within the retention window. Gaps in the record are typically resolved in the authority’s favour.

---

Currency

Swiss companies are not required to maintain accounts in Swiss francs. Where a company’s primary business operations are conducted in a foreign currency, it may keep its accounts in that currency — provided it discloses the functional currency and applies it consistently. However, for statutory purposes including tax filing, a Swiss franc balance sheet must be presented. Translation is done at the year-end exchange rate for balance sheet items and the average rate for income statement items, with exchange differences recognised in equity.

---

Filing and Public Disclosure

A point that surprises many founders coming from the UK or Germany: Swiss private companies do not file financial statements with the Commercial Register. There is no public filing obligation for AG or GmbH. Accounts are submitted to the cantonal tax authority as part of the annual corporate tax return Switzerland and remain confidential. Only the basic company data — directors, share capital, registered office — appears in the public register.

This means a Swiss company’s financial position is entirely private unless the company chooses to publish its accounts or is subject to special regulatory reporting (for example, as a bank or insurance company). For listed companies on SIX, public financial reporting is mandatory under the exchange’s listing rules. More information on cantonal tax procedures is available via the Federal Department of Finance.

For the broader tax implications of your accounting results, see our guide on corporate tax Switzerland.

---

Tax Accounting and the Massgeblichkeitsprinzip

Swiss tax law follows a principle known as the Massgeblichkeitsprinzip — the binding nature of commercial accounts for tax purposes. The profit shown in the statutory accounts is the starting point for the taxable income calculation. There is no separate set of “tax accounts.” Instead, the commercial result is adjusted for specific tax add-backs and deductions — accelerated depreciation recaptured, non-deductible provisions reversed, participation exemptions applied — to arrive at taxable income.

This connection between commercial and tax accounting means that accounting policy choices have direct tax consequences in Switzerland. Decisions about depreciation rates, provisions, and valuation methods are not merely presentational; they affect the tax charge in the same year.

If your accounting records are incomplete or in disarray, see how we handle accounting recovery Switzerland.

---

VAT and Accounting Interaction

Swiss VAT obligations interact directly with accounting records. Companies with annual turnover above CHF 100’000 — a threshold that includes worldwide taxable turnover, not just Swiss revenue — are required to register for VAT with the ESTV and submit periodic returns. The VAT method chosen — effective method or flat-rate method — affects how the income statement is presented and how input tax is tracked. Failure to reconcile VAT accounts with the general ledger is a common source of errors in Swiss tax audits. For registration requirements, see our VAT registration Switzerland guide.

---

In-House vs Outsourced Accounting

The cost question comes up in every first meeting. Here is how it breaks down in practice, based on Goldblum und Partner AG’s experience with 300+ Swiss companies:

Cost Comparison by Transaction Volume

Scenario	In-House (Salary + Software + Overhead)	Outsourced (Fiduciary)
Dormant company, zero transactions	Not practical — no workload to justify a hire	CHF 1’400/year
Dormant company in formation package	Not practical	From CHF 1’800/year
Active company, up to 100 transactions/year	Part-time bookkeeper: ~CHF 25’000/year + Bexio CHF 420-996/year	CHF 3’800/year (package)
Active company, 100-300 transactions/year	Part-time bookkeeper: ~CHF 35’000/year + software	CHF 5’000-8’000/year (hourly)
Active company, 300-1’000 transactions/year	Full-time: CHF 80’000-100’000/year + software + training	CHF 10’000-20’000/year
Complex multi-currency, intercompany	Full-time specialist: CHF 100’000-130’000/year	CHF 180/hour, billed on actuals

The break-even point is roughly 500-800 transactions per year. Below that, outsourcing is cheaper. Above that, in-house starts to make sense — but only if you can find and retain qualified Swiss accounting staff, which is a separate challenge in a market with 2% unemployment.

What outsourcing includes that in-house does not: A fiduciary handles annual accounts, tax returns, VAT filings, and correspondence with the cantonal tax authority. An in-house bookkeeper records transactions. The year-end work — tax return preparation, audit coordination, tax authority correspondence — still needs either a qualified accountant or a fiduciary on top.

Hourly rates: CHF 150/hour standard, CHF 180/hour for complex matters (multi-currency, intercompany reconciliation, restructuring). These rates exclude VAT at 8.1%.

---

The Friction Points Most Founders Miss

The VAT Threshold Trap

The CHF 100’000 registration threshold captures worldwide taxable turnover, not just Swiss revenue. A UK consultancy billing GBP 70’000 to London clients and CHF 40’000 to one Swiss client is already over the threshold. Registration must happen before the threshold is exceeded — not after. Retroactive assessments include interest and penalties.

Filing Deadlines That Compound

Corporate tax returns are due within six months of financial year-end (30 June for calendar-year companies). Extensions to 31 December are routinely granted with professional representation. But the underlying obligation to prepare annual accounts within a “reasonable time” after year-end is not waivable. Miss the tax return deadline without an extension, and the authority issues an estimated assessment — almost always unfavourable — that then requires formal objection, reconstruction, and filing to correct. Interest accrues from the original due date regardless.

The Bank Account Requirement

A Swiss company without its own bank account is viewed with suspicion by both regulators and counterparties. Banks require current annual accounts to open or maintain accounts. If the company cannot produce statements, the bank will not open an account. Without a bank account, the company cannot demonstrate operational independence, which feeds into cantonal tax authority assessments of substance and residency. Foreign-owned dormant companies are particularly affected: they need accounts to get a bank account, and they need a bank account to demonstrate that the company is a real operating entity.

Accounting Backlog: The Compounding Problem

The most common reason companies contact us is not a specific compliance issue — it is that the books have not been maintained for two or three years and the owner now needs to do something (liquidate, sell, obtain financing, or simply bring the company into compliance). Each missed year makes the next year harder to reconstruct. The cost curve is not linear — it is exponential, because each year’s opening balance depends on the prior year’s closing balance.

---

Frequently Asked Questions

“We have a dormant company with no activity — do we really need to pay CHF 1’400 per year for accounting?”

Yes. Art. 957 OR does not exempt dormant companies. A company registered in the Commercial Register must prepare annual financial statements and file a corporate tax return every year, even with zero revenue. The CHF 1’400 covers annual statements and tax filing — the absolute minimum to keep a Swiss company in good standing. Skip it, and the cantonal authority issues estimated assessments with 3% annual interest, and the company cannot be liquidated until every open year is filed and settled. We see this pattern repeatedly with companies incorporated as part of a broader plan that never materialised.

“Can we do the bookkeeping ourselves and just have you file the tax return?”

In theory, yes. In practice, self-prepared books almost always require significant correction before a tax return can be filed. The cost of reviewing and correcting DIY bookkeeping frequently exceeds the cost of having a fiduciary maintain the books from the start. If you do maintain your own books, use Bexio (CHF 35-83/month) and ensure your VAT coding is correct — this is where most self-prepared accounts fail.

“What happens if we just ignore the accounting obligations for a few years?”

The cantonal tax authority issues estimated assessments (Ermessensveranlagung) — typically 200-400% above actual liability — on which interest accrues at approximately 3% per annum. The company cannot be liquidated, cannot obtain bank financing, and cannot demonstrate substance for regulatory or banking purposes. Directors face personal liability under Art. 725 OR. Each unfiled year also blocks the filing of subsequent years, because the opening balance for year N depends on the closing balance of year N-1.

“Is Swiss GAAP FER mandatory for our company?”

Unlikely, unless you have listed bonds, are a large foundation, or your bank requires it. Most private AG and GmbH structures operate under the OR minimum. Swiss GAAP FER is recommended when you need financial statements that external parties (lenders, investors, acquirers) will find credible and comparable. The cost difference between OR-minimum and Swiss GAAP FER accounts is modest for simple structures.

“How much does it actually cost to maintain a Swiss company?”

For a dormant company: CHF 1’400/year (annual statements + tax filing). For a dormant company within a formation package: from CHF 1’800/year. For an active company with up to 100 transactions: CHF 3’800/year (package, overage billed hourly at CHF 150/hour). These figures exclude VAT at 8.1% and do not include any software subscription (Bexio at CHF 35-83/month is standard). There are no fixed annual packages for startups — transaction volumes are too unpredictable in the first one to two years.

“We crossed the CHF 100’000 revenue threshold last year but did not register for VAT — what now?”

Register immediately. The ESTV can impose retroactive VAT liability from the date the threshold was exceeded. You will owe VAT on all taxable supplies made since that date, plus interest. Voluntary late registration is treated more favourably than discovery by the ESTV during an audit. The practical first step is to file for registration and simultaneously prepare the outstanding VAT returns.

“Our company has no Swiss bank account. Is that a problem?”

It is a significant problem. Without a dedicated company bank account, the company cannot demonstrate operational independence. Cantonal tax authorities may question the company’s substance and residency. Banks require current annual accounts to open accounts — creating a circular dependency that can only be broken by first bringing the accounting up to date. If your company routes payments through a shareholder’s personal account or a foreign parent’s account, regulators view the operations as questionable.

“What are the penalties for non-compliance with Swiss accounting obligations?”

Failure to keep proper accounts can constitute a criminal offence under the Swiss Criminal Code. Directors face personal liability for any resulting tax shortfalls. In practice, the cantonal tax authority’s power to make discretionary assessments — with figures set conservatively against the company — represents the most immediate financial consequence. Fines for VAT-related bookkeeping failures can reach CHF 20’000 per infringement.

“Does Switzerland require consolidated financial statements for groups?”

Under Arts. 962–963b OR, a group must prepare consolidated financial statements if it exceeds two of three thresholds: annual revenue CHF 40 million, balance sheet total CHF 20 million, or 250 full-time employees. Smaller groups may be exempt. Consolidated statements must be prepared in accordance with a recognised standard — Swiss GAAP FER, IFRS, or US GAAP — and audited by a licensed firm.

“How does the Massgeblichkeitsprinzip affect tax planning for Swiss companies?”

The Massgeblichkeitsprinzip means commercial accounting choices feed directly into taxable income. A company that books a generous provision under the OR will reduce taxable profit in the same period — but the provision must be commercially justifiable to survive a tax audit. Conversely, aggressive capitalisation of costs inflates taxable profit. Swiss tax planning therefore begins with the chart of accounts and depreciation policy, not with year-end adjustments. For a detailed review, see our corporate tax Switzerland guide.

---

How Lawsupport Can Help

Lawsupport (Morgan Hartley Consulting) advises Swiss and international clients on accounting obligations, audit structuring, standard selection, and the practical interaction between commercial accounting and Swiss tax. Whether you are setting up a new entity, working through a complex group structure, or dealing with a backlog of unfiled accounts, our team in Zug works with you directly — no unnecessary intermediaries, no generic checklists.

---