What happens if I exceed CHF 500,000 mid-year?

You must switch to double-entry bookkeeping from the beginning of the following financial year. The current year can still be completed using cash-basis accounting. However, inform your tax office and consult a fiduciary — the transition is complex.

Is cash-basis accounting sufficient for the tax return?

Yes. The tax return for sole proprietorships is based on your income minus your expenses. Cash-basis accounting provides exactly that. Only corporations and revenue exceeding CHF 500,000 require formal financial statements.

Accounting obligations in Switzerland: simple or double-entry?

Which accounting method is mandatory for your Swiss sole proprietorship? The threshold is CHF 500,000 in revenue — everything you need to know about your accounting obligations.

2 min read

The legal basis: Article 957 of the Code of Obligations

Swiss accounting law distinguishes between two types of accounting: cash-basis accounting (also called income-expense accounting or "Milchbüchli" — a Swiss German term for a simple ledger, literally "milk booklet") and double-entry bookkeeping. Which one applies depends on your legal form and your revenue.

Cash-basis accounting

Sole proprietorships and partnerships with revenue under CHF 500,000 per year only need to keep cash-basis accounts. This means: you record your income and expenses, period. No balance sheet, no profit and loss statement in the accounting sense, no chart of accounts. The tax return is based on your income minus your expenses.

Double-entry bookkeeping

Once your revenue exceeds CHF 500,000, you must switch to double-entry bookkeeping. This involves a balance sheet, an income statement, and a chart of accounts — significantly more complex. If you're approaching this threshold, plan ahead and consider working with a fiduciary.

Corporations (GmbH, AG) are always required to use double-entry bookkeeping, regardless of revenue.

What counts as revenue?

The CHF 500,000 threshold refers to your gross revenue — i.e., before deducting any expenses. It's the total of all invoices you've issued in a financial year, not your profit. VAT is excluded from the calculation.

Accurate as of: The rates and amounts mentioned in this article reflect the state as of 6 August 2026. They are for information only and do not replace tax or legal advice. For binding information, contact the Swiss Federal Tax Administration (ESTV), your cantonal tax office, or a fiduciary.

Frequently asked questions

What happens if I exceed CHF 500,000 mid-year?: You must switch to double-entry bookkeeping from the beginning of the following financial year. The current year can still be completed using cash-basis accounting. However, inform your tax office and consult a fiduciary — the transition is complex.
Is cash-basis accounting sufficient for the tax return?: Yes. The tax return for sole proprietorships is based on your income minus your expenses. Cash-basis accounting provides exactly that. Only corporations and revenue exceeding CHF 500,000 require formal financial statements.