Company car, mobile phone, home office or business meals: Which expenses can self-employed individuals and GmbHs in Switzerland deduct for tax purposes? A practical overview with examples.
Running your own business involves a wide range of expenses. But not every payment made from a business account automatically qualifies as a tax-deductible business expense.
The key question is generally whether an expense is commercially justified and related to the business activity.
Things become particularly interesting where business and private use overlap – for example with a car, smartphone or home office.
In this article, we explain which common business expenses may generally be deductible, where private-use portions need to be taken into account and what self-employed individuals and GmbH owners should consider.
1. The basic principle: Business or private?
A simple question provides a useful starting point:
Was the expense incurred for the purpose of the business activity?
For a GmbH, commercially justified expenses can include administrative expenses, materials and goods, personnel costs, social benefits, commercially justified depreciation and various other operating expenses.
For self-employed individuals, business and private expenses must also be clearly separated.
The difficult cases are therefore usually not expenses that are clearly business-related, but those involving mixed business and private use.
A laptop used exclusively for work is relatively straightforward. A smartphone used for both business and private purposes requires a more differentiated approach.
Practical rule: The greater the potential private use of an expense, the more important it becomes to have a reasonable allocation and proper documentation.
2. Company car: Deducting costs while accounting for private use
A vehicle can represent a significant part of a business’s expenses.
If a vehicle is required for business purposes, the related costs may generally be relevant business expenses. Depending on the circumstances, these may include leasing or depreciation, insurance, servicing and repairs, or fuel.
However, if a company vehicle is also available for private use, the entire cost cannot simply be treated as purely business-related.
The private use therefore needs to be taken into account correctly.
Under the standard lump-sum method, the private share for a company car is generally calculated at 0.9% of the vehicle’s purchase price per month.
Example
A GmbH provides its owner with a company car. The vehicle is used for client visits and other business journeys but is also available to the owner for private use.
The operating costs are paid by the GmbH. At the same time, the private use of the vehicle must be treated correctly for tax purposes.
For this reason, it is advisable to determine how a vehicle will be treated for business and private purposes when it is purchased or leased.
3. Mobile phone, internet and computer
Smartphones, internet connections, laptops, monitors and software are part of the normal infrastructure of many businesses.
If these services and devices are used exclusively for business purposes, their treatment is usually relatively straightforward.
In practice, however, mixed use is common.
Example
A self-employed consultant purchases a laptop that is used almost exclusively for client projects, accounting and business correspondence.
The connection to the business activity is clear.
The situation is different with a personal mobile phone that is also used extensively for business calls. In this case, the business portion should be reasonable and private use taken into account accordingly.
Keeping separate business contracts or devices can make the accounting considerably easier.
4. Home office and workspace
Self-employed individuals frequently ask:
Can I deduct part of my home as a business expense?
There is no universal yes-or-no answer.
Relevant factors can include the actual business use, the available premises and the individual circumstances. A clearly separated room that is permanently used as an office is different from occasionally working on a laptop at the kitchen table.
A GmbH should likewise not simply record an arbitrary proportion of a shareholder’s private home as a business expense.
Example
A self-employed graphic designer has a separate room in their apartment that is permanently set up and used as an office for their professional activity.
There is a much clearer business connection than where a living room is merely used for occasional work.
Cantonal tax practice and the individual circumstances may also play a role when assessing home-office expenses. The specific deductibility should therefore be considered on a case-by-case basis.
5. Training and professional literature
Professional training may also qualify as a business-related expense.
For a GmbH, costs for job-related education and training of its own employees can form part of commercially justified expenses.
Typical examples may include:
- professional courses and seminars,
- specialist books and publications,
- training relevant to the business activity,
- certain conferences or professional events.
Once again, the connection with the professional or business activity is important.
For example, a VAT course for someone working in finance has a much clearer business connection than training with no meaningful relationship to the activity performed by the business.
6. Business meals: The business purpose matters
Business meals may also constitute business-related expenses.
However, dinner with friends does not become a business expense simply because the bill is paid with a company card.
There should be a reasonable business purpose, such as a meeting with a client or business partner.
Practical tip
For these receipts, it is useful to record:
Who attended the meal and what was the business purpose?
This small piece of additional information can be considerably more useful later than a restaurant receipt with no further context.
7. Travel, hotels and events
Necessary business travel and accommodation costs may also qualify as business expenses.
Depending on the circumstances, these can include:
- train and flight tickets,
- hotels,
- travel to clients,
- trade fairs,
- conferences and professional events.
The same principle applies here: private elements should not be included in business expenses.
For example, if a business trip is extended by several days for a private holiday, the business and private costs should be separated appropriately.
8. Insurance, fiduciary services and other ongoing expenses
In addition to the more obvious examples, businesses incur many traditional operating expenses.
These may include:
Fiduciary and accounting services
Costs for bookkeeping, annual financial statements, tax advice and other professional services.
Business insurance
Insurance policies related to the company’s business activity.
Software and subscriptions
Accounting software, cloud services, industry-specific applications and other tools required for the business.
Marketing and website
Website costs, online advertising, printed materials, business stationery and other marketing activities.
Rent and business premises
Costs for offices, practices, warehouses and other premises used for business purposes.
Personnel expenses
For a GmbH, salaries, employee benefits and mandatory social security contributions can generally form part of commercially justified expenses.
9. Sole proprietorship and GmbH: An important difference
The general principle of business-related expenses is similar, but the legal structure should not be overlooked.
With a sole proprietorship, the self-employed person and the business are not two completely separate legal persons. Nevertheless, business and private transactions must be clearly distinguished in the accounts.
A GmbH, on the other hand, is a separate legal entity.
This means that the GmbH’s money is not simply the shareholder’s private money.
Private expenses should therefore not simply be paid by the GmbH and treated as business expenses. Benefits provided by a company to shareholders that are not commercially justified or would not have been granted to an independent third party may result in tax adjustments.
Maintaining a clear separation between the company and the private individual is therefore particularly important for a GmbH.
10. Do not underestimate receipts and documentation
An expense should not only be business-related – it should also be properly documented and traceable.
Accurate accounting with invoices, receipts and any necessary additional information is therefore essential.
Digital document storage makes this considerably easier today.
For expenses involving potential private use, it is also advisable to document how the business and private portions were determined.
Good documentation does more than simplify a potential tax review. It also improves the quality of the company’s accounting and provides a clearer picture of actual business costs.
Conclusion
Self-employed individuals and GmbHs in Switzerland can take many different business expenses into account for tax purposes. What matters, however, is not simply which account was used to pay an invoice, but whether there is a sufficient connection to the business activity.
Particular attention should be paid to expenses that can have both business and private purposes – especially vehicles, smartphones, internet, home offices, travel and meals.
Separating business and private expenses from the outset and maintaining proper documentation not only simplifies the tax declaration but also creates more reliable accounting.
Where the distinction is unclear, it is advisable to assess the specific circumstances before recording a private expense as a business cost. Particularly in cases of mixed use, the actual circumstances and applicable tax practice can be decisive.