Legal accounting obligations: who must keep accounts and how?

The legal framework: what the Swiss Code of Obligations says

In Switzerland, accounting obligations are defined by the Code of Obligations (CO), articles 957 and following. This legal framework applies to all businesses, regardless of their legal form.

The CO distinguishes three categories of economic actors:

• Sole proprietorships (individual business)

• Partnerships (general partnership, limited partnership)

• Capital companies (SA, Sàrl) and associations, foundations

Each category is subject to different accounting obligations depending on its size and turnover. The CO provides for three levels of requirements: simplified accounting, accounting in due and proper form, and the audit obligation for large structures.

This hierarchy allows administrative constraints to be adapted to the economic reality of each business.

The three levels of accounting obligations

The Code of Obligations provides for three distinct accounting regimes, adapted to the size and legal form of businesses.

First level: simplified accounting. Reserved for small sole proprietorships and partnerships whose turnover remains below a certain threshold. It is limited to a journal of income and expenses, and a statement of assets.

Second level: accounting in due and proper form. Mandatory for all capital companies and businesses exceeding the thresholds. It requires keeping a complete journal, preparing a balance sheet and an income statement according to recognised accounting principles.

Third level: audit obligation. Beyond certain size thresholds, businesses must have their annual accounts audited by an approved auditor.

Simplified accounting: for whom and how?

Article 957 paragraph 2 CO authorises a simplified regime for sole proprietorships and partnerships whose annual turnover does not exceed 500,000 CHF.

This simplified regime requires only:

• A journal of income and expenses

• A statement of assets (list of assets and liabilities)

What is not mandatory under simplified accounting:

• No complete balance sheet according to accounting standards

• No detailed income statement

• No strict application of the principles of regularity and clarity

Warning: even under simplified accounting, you must keep all supporting documents for 10 years. And if you are subject to VAT, additional obligations apply (see dedicated section).

Accounting in due and proper form: the standard regime

Article 957 paragraph 1 CO requires accounting in due and proper form for:

• All capital companies (SA, Sàrl), without exception

• Sole proprietorships and partnerships exceeding 500,000 CHF turnover

• Associations and foundations required to register in the commercial register

This regime imposes specific CO obligations:

• Keeping a journal recording all transactions chronologically

• Preparing an annual balance sheet

• Preparing an income statement (profit and loss)

• Justifying all entries with accounting documents

The annual accounts must comply with the principles of regularity, clarity and faithful presentation of the economic situation. They must be prepared within six months following the end of the financial year.

The audit obligation: beyond certain thresholds

The audit obligation (articles 727 and following CO) is distinct from accounting obligations. It requires external control of annual accounts by an approved auditor.

Ordinary audit mandatory if the business exceeds 2 of the following 3 criteria:

• Total balance sheet: 20 million CHF

• Turnover: 40 million CHF

• Workforce: 250 full-time jobs

Limited audit (limited review) for other capital companies, unless opting-out.

Opting-out allows small structures (fewer than 10 employees) to waive the audit if all shareholders/partners accept it in writing.

Important: the audit obligation is in addition to the obligation to keep accounting in due and proper form. It does not replace your basic CO accounting obligations.

Cantonal and communal obligations

Beyond the Code of Obligations, cantons and communes can impose additional requirements for tax returns.

Even if your business benefits from simplified accounting at the federal level, your cantonal tax administration may require:

• More detailed accounting documents

• A complete balance sheet for wealth tax

• An income statement for income or profit tax

These requirements vary from one canton to another. Some cantons accept a simplified presentation, others impose standardised forms.

Practical advice: Enquire with your cantonal tax administration as soon as you create your business. Cantonal obligations can influence your choice between simplified accounting and complete accounting, even if you remain below the CO thresholds.

Obligations related to VAT

VAT liability creates additional accounting obligations, regardless of your regime under the CO.

You are subject to VAT if your annual turnover exceeds 100,000 CHF (or 150,000 CHF for certain activities). From this threshold, you must:

• Keep accounts allowing you to justify your VAT returns

• Distinguish transactions according to applicable rates: 8.1% (standard rate), 3.8% (accommodation), 2.6% (basic necessities)

• Keep all supporting documents

• Issue compliant invoices with VAT mentioned

Even under simplified accounting, VAT liability requires increased accounting rigour. You must be able to justify each amount declared.

To learn more about keeping supporting documents, consult our complete guide on legal archiving.

Retention and archiving: your obligations for 10 years

Article 958f CO requires the retention of all accounting documents for 10 years. This obligation applies to all businesses, regardless of their accounting regime.

Must be kept for 10 years:

• Accounting books (journal, general ledger)

• Supporting documents (invoices, receipts, contracts)

• Commercial correspondence

• The balance sheet and income statement

• VAT returns and tax documents

Since 2025, new rules govern the digital retention of documents. Electronic archives are accepted if they guarantee the integrity, readability and accessibility of data.

The 10-year period runs from the end of the relevant financial year. For detailed advice on organising your archiving, consult our article dedicated to document retention.

Consequences of non-compliance with obligations

Non-compliance with CO accounting obligations exposes the business and its managers to serious consequences.

Administrative and tax sanctions:

• Fines that can reach several thousand francs

• Ex officio taxation by the tax administration (arbitrary estimate of profit)

• Refusal of deduction of unjustified expenses

Problems in case of VAT audit:

• Impossibility of justifying VAT deductions

• Tax assessments with default interest

Legal risks:

• Difficulties in case of commercial disputes (lack of evidence)

• Serious problems in case of bankruptcy (impossible reconstruction of accounts)

• Personal liability of management bodies (directors, managers)

Accounting compliance is not an option: it protects your business and your personal assets.

How BePaid helps you stay compliant

BePaid does not replace a complete accounting solution, but considerably facilitates compliance with your accounting obligations regarding invoicing.

Automatic compliance:

• Swiss QR-invoices compliant with current standards

• Automated VAT management according to rates (8.1%, 3.8%, 2.6%)

• Sequential numbering of invoices

Organisation and traceability:

• Digital retention of all your invoices

• Accounting exports for your fiduciary (standard formats)

• Bank reconciliation to track payments

• Complete history accessible in a few clicks

BePaid simplifies the invoicing part of your accounting, allowing you to transmit clean and structured data to your fiduciary or to keep your journal more easily.

Are you hesitating between managing your accounting yourself or delegating it? Consult our detailed comparison to make the right choice.

Accounting obligations in Switzerland vary according to your legal status and turnover. Self-employed individuals under 500,000 CHF can make do with simplified accounting, whilst companies must keep a journal and prepare a balance sheet in due and proper form. Beyond certain thresholds, the audit obligation is added.

Document retention for 10 years remains mandatory for everyone, as does compliance with VAT obligations if you are liable. Non-compliance with these rules exposes you to fines, or even criminal sanctions in case of fraud.

BePaid simplifies your daily compliance: create compliant QR-invoices, track your payments, automate your reminders and export your accounting data for your fiduciary or your return. Create your free account and manage your invoicing with complete peace of mind, starting today.