Expense claims for Swiss sole proprietors and GmbHs: keeping them audit-proof
Expense claims in Switzerland are free of AHV and tax when they cover real, documented business costs. How GmbH and sole proprietorship differ and what a clean claim looks like.
In short: Expense claims in Switzerland survive an AHV or tax audit when they contain only actual, business-related costs and every item is backed by a receipt and a stated purpose. Flat-rate expenses (Pauschalspesen) are only safe with an expense regulation approved by the cantonal tax administration. In a sole proprietorship there are no expense claims in the payroll sense, only business costs, which must be documented just as carefully.
Expenses are the classic audit topic. The AHV compensation office checks during its employer audit whether "expenses" hide disguised salary, and the tax administration checks the same thing on the salary certificate and in the books. If your expense claims are clean, there is nothing to fear. If they are sloppy, you risk back payments of social security contributions, taxes and default interest for several years.
This article explains how a GmbH and a sole proprietorship differ, when an expense regulation makes sense and what an expense claim looks like that passes any audit.
What is the difference between expenses in a GmbH and in a sole proprietorship?
In a GmbH you are an employee of your own company; in a sole proprietorship you are the company. That changes the entire logic.
In a GmbH (and in an AG), Art. 327a of the Swiss Code of Obligations applies: the company must reimburse all costs you necessarily incur while working. This reimbursement is not salary, so it is neither subject to AHV contributions nor taxable, as long as it covers actual costs and nothing more. Expenses appear on the salary certificate (Lohnausweis) under section 13. Anything above actual costs is salary.
In a sole proprietorship (Einzelfirma) there is no employment contract with yourself and therefore no expense claim in the labour law sense. Business costs are simply business expenses in the books: the trip to a client, the train ticket, tools, a client lunch. They reduce profit, and with it both income tax and the AHV contributions you pay on profit as a self-employed person. That is exactly why the tax administration checks whether each cost is business-related and whether a private share has been excluded. For your employees, however, the GmbH logic with reimbursement and salary certificate applies in a sole proprietorship too.
| Topic | GmbH (owner employed) | Sole proprietorship (owner) |
|---|---|---|
| Legal nature | Reimbursement under Art. 327a CO | Business expense |
| Appears in | Salary certificate, section 13 | Profit and loss statement |
| AHV | Exempt if actual and documented | Reduces profit subject to contributions |
| Flat-rate expenses | Safe only with approved regulation | Not applicable |
When are expenses free of AHV and tax?
Expenses are exempt from AHV and tax when they reimburse actual costs incurred in the company's interest and this can be shown with receipts. Three conditions must be met together:
- A business reason: a client meeting, a business trip, material for a job. An after-work beer without a client is private.
- The actual amount: what the receipt shows is reimbursed, not a round figure "roughly".
- Documentation: receipt plus purpose, and for hospitality the names of the guests.
Even small amounts deserve a receipt. The model expense regulation of the Swiss Tax Conference (SSK) does allow modest daily flat rates for minor costs, but only within a regulation and at a low level. Without a regulation the rule is simple: no receipt, no tax-free reimbursement. Which receipts you need on the road and which you can skip is covered in business travel expenses.
Flat-rate expenses, meaning a fixed monthly amount for representation or car use, are the delicate part. Without an approved regulation they must be shown as an amount on the salary certificate, and the tax administration decides how much of it it accepts as reimbursement. The rest becomes taxable salary, and the compensation office adds AHV contributions.
Do you need an expense regulation?
A small GmbH with one or two people does not need an expense regulation as long as it reimburses only actual expenses against receipts. A regulation becomes useful once you want to pay flat rates or several employees regularly incur costs.
This is how it works:
- You draft a regulation based on the SSK model. It sets rates for meals, accommodation, mileage and any flat rates for management and field staff.
- You submit it to the tax administration of the canton where the company is based. Approval is recognised by the other cantons.
- On the salary certificate you note under section 15 that the regulation was approved by canton X on a given date. Actual expenses are then shown only with a tick in section 13.1.1, flat-rate expenses as amounts in section 13.2.
The advantage of an approved regulation is legal certainty: what is paid under the regulation counts as reimbursement. The disadvantage is the effort. For a sole proprietorship without staff it is unnecessary.
Which receipts must an expense claim include?
Every expense item needs an original receipt showing date, amount, service and issuer, plus the business purpose. For the input VAT deduction, the requirements of Art. 26 of the VAT Act (MWSTG) apply as well; till receipts up to CHF 400 do not need to name the recipient. What a VAT-compliant receipt must show is explained in VAT-compliant receipts in Switzerland.
| Expense type | Receipt | Additional information |
|---|---|---|
| Client meal | Restaurant receipt | Names of guests, occasion |
| Train, tram, flight | Ticket, booking confirmation | Destination and purpose |
| Private car | Mileage log | Date, route, purpose, rate per regulation |
| Hotel | Hotel invoice | Occasion, duration |
| Material, small equipment | Till receipt or invoice | Project or job number |
Receipts must be kept for 10 years, on paper or digitally (Art. 958f CO). Thermal paper till receipts are unsuitable for that because they fade. A photo on the day of purchase solves it: with Belego every receipt becomes a PDF, amount and date are read automatically, the purpose goes into the note field, and at month end you export the month's expenses as a ZIP with PDFs and a CSV list for the books. The details of what to keep for how long are in how long to keep receipts in Switzerland.
What a clean expense claim looks like
A good expense claim is a list per person and month with a receipt behind every line. An example month in a small GmbH:
- 3 March, train ticket Zurich to Bern, CHF 52, client meeting at Muster AG.
- 3 March, lunch with two people from Muster AG, CHF 118, project discussion, names listed on the claim.
- 12 March, parking at the construction site, CHF 14, job no. 2026-031.
- 20 March, technical book, CHF 79, project preparation.
Total CHF 263, paid out with the salary or by separate transfer, booked as expense cost in the accounts, receipts filed alongside. Done. What makes this list work: no round numbers, every item with a reason, everything with a receipt.
To manage this without spreadsheet chaos, see expense reports with an app. Self-employed people without staff will find the matching approach for business costs in self-employed in Switzerland.
Which mistakes show up in an AHV audit?
Employer audits keep finding the same patterns. Avoid these five:
- Round monthly amounts without a regulation, such as "CHF 500 expenses" every month. That is salary until proven otherwise.
- Restaurant receipts without guest names. Without names it is a private meal.
- Private shares not excluded, for example on the company car or the mobile phone.
- Expenses paid to family members who are not actually employed.
- Missing receipts, because the till slip faded or the paper was lost.
The last one is the most common and the easiest to avoid. A one-minute routine per receipt is all it takes.
Note: This article is general guidance, not tax advice. The law, your canton's tax guide and the information from your tax authority or your Treuhänder (the Swiss term for a trustee or accountant) are what count.
Frequently asked questions
Are flat-rate expenses allowed in a GmbH without an expense regulation?
Allowed, yes, but not safe. Without an approved regulation you must show flat-rate expenses as an amount on the salary certificate under section 13.2. The tax administration then judges whether the amount matches actual costs. Whatever it does not accept becomes salary, including AHV contributions. For small companies it is usually simpler to reimburse only actual expenses against receipts.
Can I pay myself expenses as the owner of a sole proprietorship?
Not in the sense of an expense claim. You have no employment contract with yourself. You pay business costs from the business account or privately and book them as business expenses with a receipt. If you pay privately, the bookkeeping records a private contribution. The only thing that matters is that every cost is business-related and documented.
How long do I have to keep expense receipts in Switzerland?
Ten years, like all accounting records under Art. 958f of the Code of Obligations. The period starts at the end of the financial year. Digital copies are permitted as long as they remain unchanged and legible. For thermal paper till receipts, a scan is in fact the only way the document will still be readable after ten years.
What happens if the compensation office reclassifies expenses as salary?
The office charges AHV, IV, EO and unemployment insurance contributions on the amount, often retroactively for several years, plus default interest. The tax administration can add the amount to taxable income as well. In cases of intent, fines are possible on top. A documented, traceable expense claim is the best protection against this.