As a self-employed worker in Switzerland (sole proprietorship, general partnership or limited partnership), your professional income is declared in your personal tax return. There is no separate company tax return, unlike capital companies (LLC, corporation). This particularity implies specific rules regarding deductions, social charges and tax optimisation.
Taxation of self-employed individuals: the principle
The net profit from your self-employed activity is taxed as employment income, in the same way as a salary. It is subject to:
- Income tax (federal, cantonal, municipal) at progressive rates
- AHV/IV/APG social contributions (approximately 10.6% of net income)
This progressive taxation can be significantly higher than corporate taxation (proportional rate of approximately 14.7% in Geneva), especially for high incomes.
| Taxable income | Federal marginal rate | Cantonal marginal rate (GE, approx.) |
|---|---|---|
| Up to CHF 31,600 | 0.77% | ~8% |
| CHF 31,601 - 41,400 | 0.88 - 2.64% | ~10% |
| CHF 41,401 - 55,200 | 2.97% | ~12% |
| CHF 55,201 - 72,500 | 5.94% | ~14% |
| CHF 72,501 - 78,100 | 6.60% | ~16% |
| CHF 78,101 - 103,600 | 8.80% | ~18% |
| CHF 103,601 - 134,600 | 11.00% | ~21% |
| CHF 134,601 - 176,000 | 13.20% | ~24% |
| Above CHF 176,000 (fed.) / 663,800 (GE) | 11.50% (max.) | ~27% (max.) |
Cantonal rates are indicative and include municipal additional centimes for the city of Geneva.
Calculating taxable net profit
The net profit from self-employment is calculated as follows:
- Turnover (total professional receipts)
- - Professional expenses (all expenses necessary for the activity)
- - Depreciation of professional assets
- - Personal social contributions (AHV/IV/APG)
- = Net profit from self-employment
This profit is then added to the taxpayer's other income (property income, investment income, etc.) to determine total taxable income.
Deductible professional expenses
Professional deductions are essential for reducing your tax burden. Here are the main categories:
Expenses directly related to the activity
| Category | Examples | Conditions |
|---|---|---|
| Purchases and merchandise | Raw materials, resale goods | Receipts required |
| Subcontracting | Services outsourced to third parties | Provider invoices |
| Business rent | Office, workshop, warehouse | Lease or contract |
| Home office | Proportion of rent, heating, electricity | Room exclusively for professional use |
| Supplies and equipment | Stationery, small equipment, consumables | Professional use |
| Telecommunications | Telephone, internet, subscriptions | Professional portion |
| Professional insurance | Professional indemnity, property insurance | Related to the activity |
| Professional fees | Fiduciary, lawyer, consultant | Related to the activity |
| Continuing education | Courses, seminars, certifications | Related to the activity practised |
| Marketing and advertising | Website, advertising, business cards | Professional use |
Professional vehicle
If you use a vehicle for your activity, two methods are possible:
- Actual expenses: you deduct the real costs (fuel, insurance, maintenance, depreciation) proportional to professional use (logbook recommended)
- Mileage allowance: CHF 0.70/km for cars (federal tax administration), a simpler method but sometimes less advantageous
Social contributions and pension
| Contribution | Rate / Amount | Deductibility |
|---|---|---|
| AHV/IV/APG | ~10.6% of net income | Fully deductible |
| BVG (2nd pillar, if affiliated) | Variable (contributions + buybacks) | Fully deductible |
| Pillar 3a | Max. CHF 35,280/year (without BVG) or CHF 7,056/year (with BVG) in 2026 | Fully deductible |
| Loss of earnings health insurance | Variable | Deductible as a professional expense |
Important: Pillar 3a is one of the most powerful tax optimisation levers for self-employed individuals. A self-employed person without BVG can deduct up to CHF 35,280 per year (2026 amount). That is an immediate tax saving of CHF 10,000 to CHF 15,000 depending on the marginal rate.
Depreciation of professional assets
Assets used for professional activity (vehicle, furniture, IT equipment, machinery) must be depreciated at the rates permitted by the tax administration. Consult our annual closing guide for detailed rates.
Loss carry-forward
If your self-employment generates a loss, it can be:
- Offset against other income of the same year (spouse's salary, property income, etc.)
- Carried forward to the following 7 years if it cannot be fully offset
Loss carry-forward is particularly important for self-employed individuals in the start-up phase, who often record losses in the first years.
VAT for self-employed individuals
Self-employed individuals are subject to VAT if their annual worldwide turnover exceeds CHF 100,000. Below this threshold, registration is voluntary.
Registered self-employed individuals can opt for the net rate debt method (NRDM), a simplified method that avoids accounting for VAT on each purchase. It is advantageous for service providers with few purchases subject to VAT.
Should you set up an LLC?
Above a certain income level, it may be fiscally advantageous to convert your sole proprietorship into an LLC. Here is a simplified comparison:
| Criterion | Sole proprietorship | LLC |
|---|---|---|
| Profit taxation | Progressive rate (up to ~40%+ with ICC) | Proportional rate (~14.7% in GE) |
| AHV contributions | ~10.6% on net profit | ~10.6% on salary only |
| Profit distribution | Free (no double taxation) | Dividend taxed at 50-70% (+ 35% anticipatory tax) |
| Liability | Unlimited (personal assets) | Limited to share capital |
| Administrative costs | Low | Higher (CR, mandatory accounting) |
| Interest threshold | - | Generally from CHF 100,000-150,000 profit |
As a general rule, setting up an LLC becomes advantageous when net profit exceeds CHF 100,000 to CHF 150,000 per year. Below that, the additional administrative costs are not offset by the tax savings. Consult our company formation guide for more information.
The AX-Fiduciaire process for your tax return
- Document collection: we gather financial statements, social contribution statements, Pillar 3a receipts, etc.
- Net profit calculation: we determine the net profit of your activity by maximising permitted deductions
- Complete tax return: we integrate the professional profit into your personal tax return with all other elements (income, assets, personal deductions)
- Overall optimisation: we optimise your entire tax situation (couple, children, pension)
- Filing and follow-up: we file the return and manage follow-up with the administration
AX-Fiduciaire tip: Rigorous bookkeeping throughout the year is the key to an optimised tax return. Every correctly documented professional expense is a potential tax deduction. Our accounting packages from CHF 149/month include the tax return.
Ready to optimise your tax return? Request a free quote for our self-employed tax return services.