Annual Accounting and Audit Obligations
Swiss Accounting Framework: The Code of Obligations
Swiss corporate accounting is governed by the Code of Obligations (OR/CO), specifically Articles 957 through 963b (the "Accounting Reform 2015"). These rules require every Swiss company to maintain proper accounts, but the depth and complexity of required accounting depends on the company's size.
The Three Accounting Tiers
Simplified Accounting (Einzelpersonen & Personengesellschaften)
Sole proprietors and partnerships with annual revenue below CHF 500,000 are permitted to use simplified accounting — a basic income/expense record rather than full double-entry bookkeeping. This does NOT apply to GmbH or AG, which must use full double-entry bookkeeping regardless of size.
Full Accounts (Jahresrechnung) — Required for ALL GmbH and AG
Every GmbH and AG must prepare annual accounts (Jahresrechnung) comprising: income statement (Erfolgsrechnung), balance sheet (Bilanz), and notes (Anhang). Swiss GAAP or Swiss GAAP FER applies. The financial year (Geschäftsjahr) is typically the calendar year but can be any 12-month period defined in the statutes.
Enhanced Accounts (Konzernrechnung / Consolidated)
Companies exceeding any two of: CHF 40M total assets, CHF 80M revenue, 500 FTE average — or listed companies, regulated financial intermediaries — must prepare consolidated accounts under Swiss GAAP FER or IFRS.
Audit Requirements: When You Need One
| Audit Type | Triggered When | Scope | Auditor Qualification |
|---|---|---|---|
| Ordinary Audit (Ordentliche Revision) | Two of three: CHF 40M assets, CHF 80M revenue, 250+ FTE OR any public interest entity |
Full audit opinion on fairness of presentation, internal controls review | Licensed Audit Expert (RAB Level 2) |
| Limited Statutory Audit (Eingeschränkte Revision) | Companies below ordinary audit threshold that do NOT opt out | Review procedures (plausibility checks, inquiries) — lower assurance than full audit | Licensed Auditor (RAB Level 1) sufficient |
| No Audit (Opting Out) | Companies with fewer than 10 FTE AND unanimous shareholder approval to waive | No statutory audit — management accounts accepted by tax authority | No external auditor needed |
The Audit Opt-Out: The Most Common Choice for Swiss SMEs
The overwhelming majority of Swiss GmbH with fewer than 10 employees choose to waive the limited statutory audit. This requires unanimous shareholder resolution (all shareholders agreeing in writing) and saves CHF 3,000-8,000 per year in audit fees. The company still needs to prepare proper annual accounts — they just don't need an external auditor to review them. Tax authorities fully accept non-audited accounts for companies that have properly opted out.
The Swiss Annual Accounts: What Must Be Included
- Balance Sheet (Bilanz) Assets (current + fixed) and liabilities (current + long-term) + equity — as of December 31
- Income Statement (Erfolgsrechnung) Revenue, COGS, gross margin, operating expenses, depreciation, interest, tax, net profit
- Notes to Accounts (Anhang) Accounting policies, valuation principles, details on long-term liabilities, pledged assets, contingencies
- Appropriation of Retained Earnings Board proposal for how net profit should be distributed or retained — shareholders must vote on this
- Annual Report (Geschäftsbericht) Required for companies above CHF 40M turnover — narrative analysis of results, strategy, risks
- Shareholder Meeting Minutes (GV-Protokoll) Record of Annual General Meeting: approval of accounts, discharge of board, dividend resolution
Accounting Calendar: Key Swiss Annual Deadlines
Thomas's Domino Effect: Late Accounts Cost CHF 22,000
Thomas incorporated his Zug GmbH in January 2023. He assumed there was no urgency to prepare accounts until the tax authority asked for them. By March 2024, he still hadn't prepared his 2023 accounts. The Zug tax authority issued an estimated assessment (Ermessenseinschätzung) based on assumed income — estimated high to create incentive to file actual accounts. The estimated assessment produced a CHF 22,000 corporate tax bill vs. the CHF 8,400 he would actually have owed.
To correct the estimated assessment, he needed to file the actual accounts and challenge the assessment — adding legal and accountant fees of CHF 3,500.
Key Takeaways — Lesson 2
- All GmbH and AG must prepare full annual accounts (balance sheet + P&L + notes) regardless of size
- The audit opt-out is available to companies with fewer than 10 employees and unanimous shareholder consent — saves CHF 3,000-8,000/year
- Shareholder approval of annual accounts must occur within 6 months of year-end (June 30 for December year-end)
- Late accounts trigger estimated tax assessments from cantonal authorities — always more expensive than actual tax
- Use accounting software (Bexio, Banana Accounting) or a Treuhand from day one to stay on top of bookkeeping