Year-End Closing Checklist for Sole Proprietorships

01Why a Clean Year-End Closing Matters

The year-end closing is more than a tedious obligation. For sole proprietorships in Switzerland, it forms the basis for the tax return, gives you a clear overview of your business's financial position and is required by law.

Under CO Art. 957, all sole proprietorships are subject to bookkeeping obligations. For sole proprietorships with less than CHF 500,000 in annual revenue, simplified bookkeeping in the form of an income-expenditure statement is sufficient. Double-entry bookkeeping is only required from CHF 500,000 in revenue.

A properly prepared year-end closing protects you from problems with the tax office, enables a realistic assessment of your business development and forms the basis for informed decisions in the new year. You also need the figures for your OASI contribution calculation.

Retention obligation: 10 yearsAll business documents -- receipts, invoices, bank statements, accounting records -- must be retained for 10 years under CO Art. 958f. This also applies to digitally stored documents.

02Step 1: Collect and Review Receipts

The first and most important step in the year-end closing: gather all receipts from the past year and check whether the collection is complete. Our article on document retention explains what you need to keep and for how long. Missing receipts are the most common cause of problems with the tax return.

You should have the following receipts complete:

Income receipts: All issued invoices, receipts, cash income records
Expense receipts: All purchase invoices, receipts, credit card statements
Bank statements: All account statements for all business accounts, complete for the entire year
OASI statements: Advance payment bills and any final settlements from the compensation fund
VAT returns: All filed VAT returns (if subject to VAT)
Insurance policies: Premium invoices for business insurance
Contracts: Lease, leasing and licence agreements with corresponding invoices

Tip: Do a bank reconciliationMatch every entry on the bank statement with a receipt. Every transaction must be explainable. Request missing receipts immediately or at least create your own note.

03Step 2: Prepare the Income-Expenditure Statement

For sole proprietorships with revenue under CHF 500,000, the income-expenditure statement is the prescribed form of bookkeeping. It is considerably simpler than double-entry bookkeeping and shows at a glance whether you made a profit or a loss.

The income-expenditure statement is divided into two main areas: On the income side, you record all business income (fees, sales revenue, ancillary income). On the expense side are all business costs (materials, rent, insurance, vehicle, telecommunications, software, OASI contributions, etc.).

Income-expenditure statement -- Simplified example: INCOME -- Fees/services: CHF 95,000, Ancillary income: CHF 2,500, Total income: CHF 97,500. EXPENSES -- Office/rent: CHF 12,000, Software & IT: CHF 3,200, Telephone/Internet: CHF 1,800, Insurance: CHF 2,400, Travel costs: CHF 4,500, OASI/DI/IC contributions: CHF 8,480, Other expenses: CHF 5,120, Total expenses: CHF 37,500. PROFIT: CHF 60,000.

This profit is your taxable income from self-employment. It is declared as income in the tax return and also serves as the basis for the OASI contribution calculation.

04Step 3: VAT Annual Reconciliation

This step only applies if you are subject to VAT (revenue above CHF 100,000 per year or voluntary registration). If not, you can skip directly to Step 4.

The VAT annual reconciliation ensures that the VAT amounts declared during the year match the actual figures from your bookkeeping. Differences can arise if invoices were subsequently corrected or cancelled.

Revenue reconciliation: Compare the revenue recorded in the bookkeeping with the revenue declared in the VAT returns.
Input tax reconciliation: If you use the effective method, check whether all claimed input taxes are correct.
Finalisation return: If the reconciliation reveals a difference, report it to the FTA via the finalisation return ('Annual reconciliation' form).

Do not miss the deadlineThe finalisation return must be submitted within 180 days after the end of the financial year -- for a financial year ending 31 December, that is 30 June of the following year at the latest.

05Step 4: Review OASI Statement

During the year, you made quarterly OASI advance payments to the compensation fund. At year-end closing, you should check whether the advance payments made roughly match your actual net income.

Compare your actual net income (the profit from your income-expenditure statement) with the income on which your advance payments were based. If there is a significant deviation, it is advisable to proactively inform the compensation fund and have the advance payments adjusted for the current year.

OASI advance payment check: Advance payment based on previous year -- Estimated income (previous year): CHF 50,000, Advance contribution (10.6%): CHF 5,300. Actual income -- Actual profit: CHF 60,000, Final contribution (10.6%): CHF 6,360. Difference (back-payment): CHF 1,060.

The final settlement only takes place after the tax assessment -- this can take 1-2 years. Nevertheless, it is sensible to plan for the expected back-payment and build up appropriate reserves.

06Step 5: File the Tax Return

Once your income-expenditure statement is ready and all reconciliations have been completed, it is time for the tax return. Do not forget to correctly accrue open items -- our article on accruing receivables at year-end shows you how. As a sole proprietor, you declare the business profit as part of your personal income -- there is no separate business tax return.

The deadline for the tax return varies by canton but is 31 March of the following year in most cantons. In many cantons, you can request a free or low-cost extension -- sometimes until September or even November.

You submit the following documents with the tax return:

Income-expenditure statement: The complete breakdown of your business income and expenses
Schedule of business assets: If you own operating equipment (computers, vehicles, etc.)
Schedule of debts: If business debts exist
Private use calculation: If you also use business vehicles, telephone or premises privately

Request a deadline extensionMost cantons offer a simple online deadline extension. Request it in good time -- a late submission without an extension can result in reminder fees and in the worst case a discretionary assessment.

07Checklist to Tick Off

Here is the complete year-end closing checklist at a glance. Work through the items in order:

#	Task	Deadline
1	Collect all receipts for the year	January
2	Check and reconcile bank statements completely	January
3	Clarify outstanding invoices (receivables/payables)	January
4	Prepare income-expenditure statement	February
5	Carry out VAT annual reconciliation (if applicable)	By 30 June
6	Review OASI advance payments and adjust if needed	February
7	Calculate private use portions (vehicle, telephone, etc.)	February
8	Update asset register	February
9	Complete and file tax return	31 March*
10	Securely archive all documents (10 years)	Ongoing

* Deadline varies by canton. Deadline extensions are possible in most cantons.

08Frequently Asked Questions About the Year-End Closing

The deadline varies by canton but is usually 31 March of the following year. In many cantons, you can request a free or low-cost deadline extension -- sometimes until September or November.

No, as a sole proprietorship under CHF 500,000 revenue, you are not required to engage an accountant. With a clean income-expenditure statement and all receipts, you can prepare the closing yourself. An accountant can be helpful in more complex situations, however.

If you do not file the tax return on time, you will first receive a reminder with an extended deadline. If you still do not respond, the tax authority may carry out a discretionary assessment -- often to your disadvantage. Fines and default interest may also be imposed.

Under CO Art. 958f, the retention obligation for business documents is 10 years from the end of the financial year. This applies to all receipts, invoices, bank statements, contracts and the accounting records themselves -- both in paper and digital form.