Tax Return for Sole Proprietorships: A Step-by-Step Guide

As the owner of a sole proprietorship, there is no separate corporate tax return. Your business profit flows directly into your personal tax return and is taxed together with your other income — at the federal, cantonal, and municipal level. While this sounds straightforward, there are pitfalls: forms, private-use portions, depreciation, and deadlines must all be correct to avoid overpaying or risking a tax reassessment.

This guide walks you through the tax return step by step — from the required forms to the correct declaration to the most important deductions. Make sure your annual closing is complete before you start your tax return.

01Which forms do I need?

In addition to your personal tax return, self-employed individuals need additional supplements. The exact names vary by canton, but the content is the same everywhere:

1. Personal tax return (cantonal): The main form where you declare income, assets, deductions, and marital status. In most cantons, you fill it out online (e.g. eTax, ZHprivateTax, BE-Login)
2. Supplementary form for self-employed persons: Here you declare your business result (revenue, expenses, profit). The form is called 'Questionnaire for Self-Employed', 'Supplement SE', or similar, depending on the canton. Don't forget the securities register if you hold business assets in securities
3. Balance sheet & income statement OR income-expenditure account: Sole proprietorships with annual revenue below CHF 500,000 may submit a simplified income-expenditure account (EAR) (Art. 957 para. 2 CO). From CHF 500,000 in revenue, proper bookkeeping with a balance sheet and income statement is mandatory

02Declaring your business result correctly

The core of your tax return as a self-employed person is the correct determination of your net profit. How to calculate your profit as a sole proprietor is explained in a separate article. Net profit is calculated as revenue minus business-related expenses. The following principles apply:

Record all income completely

All income from self-employment must be declared — not just the invoices you issued. This includes barter transactions (e.g. you design a website and receive a service in return), benefits in kind (e.g. free products from clients), and own consumption. These must be recorded at market value.

Deduct business expenses correctly

You may deduct all business-related costs from your revenue: materials, rent, insurance, subcontractor services, advertising, etc. Expenses must be actually incurred, business-justified, and documented. Private expenses are not deductible.

Separate private-use portions correctly

Many self-employed individuals use their car, phone, or office for both private and business purposes. In this case, the private-use portion must be separated. The FTA provides benchmark values:

Depreciation according to FTA rates

Capital assets (computers, furniture, vehicles, machinery) are not immediately expensed but are depreciated over their useful life. The FTA publishes the permissible maximum rates for declining-balance and straight-line depreciation in Circular A1995. Examples:

03Important deductions for self-employed persons

In addition to business expenses, there are further deductions that reduce your taxable income — find a complete overview in our article on saving taxes as a sole proprietor. These are claimed in the personal tax return — not in the business accounts:

04Common mistakes in the tax return

We see these mistakes again and again — they cost money or lead to unnecessary problems with the tax office:

1. Missing receipts: The burden of proof for deductions lies with the taxpayer (Art. 130 para. 2 DFTA). Without a receipt, the deduction is denied. Keep all receipts, invoices, and bank statements for at least 10 years
2. Forgetting the private-use portion: Anyone who fails to separate the private-use portion for mixed-use assets (car, phone, home office) declares too low a profit. The tax office will add back the missing private portion — plus default interest
3. Accrual errors (periodicity principle): The accrual principle applies: what matters is when the service was rendered, not when payment was received. A service rendered in December belongs to the old fiscal year, even if the invoice is only paid in January
4. Missing the deadline: If you don't submit your tax return on time, you'll receive a reminder with a fee (CHF 40–100 depending on the canton). Repeated failure risks a discretionary assessment — the tax office estimates your income, usually significantly higher than reality

05Tax return deadlines

The submission deadline for the tax return varies by canton. In most cantons, the standard deadline is 31 March of the following year. Some cantons set different dates:

A deadline extension is straightforward in most cantons — often directly online via the cantonal tax administration's website or by a short written request. The extension is typically 1 to 6 months, depending on the canton.

06Frequently asked questions about tax returns for sole proprietorships