Depreciating Business Assets in Switzerland: The Tax Rules for the Self-Employed

A laptop or a machine serves your business for years, so Swiss tax law does not let you deduct its full cost in the year of purchase. Durable business purchases are investments, and their cost is spread over the useful life through depreciation (Abschreibung). Recording it correctly keeps profit, tax and contribution basis consistent.

What counts as an asset you depreciate

Assets used in the business for more than one year are capitalised, not expensed. The ESTV circular on self-employed taxation says investments such as vehicles and machines are activated, with periodic depreciation matching their loss of value; such write-offs are deductible under Article 28 of the Federal Direct Tax Act.[1]

Small items you replace continuously, such as a mouse, a keyboard or hand tools, are usually booked as ordinary costs. There is no federal value threshold: many cantons allow an immediate full write-off for movable equipment that is continuously replaced, and that practice can also apply to direct federal tax when it reaches the same long-term result.[2]

The asset must serve the business. A laptop used only for client work is depreciable in full; a vehicle driven partly privately is depreciated only on its documented business share, applied consistently.

Sole proprietors with turnover below CHF 500,000 may keep simplified accounts, but write-offs must still be traceable: shown in the books or, with simplified bookkeeping, in the depreciation tables of the tax return.[1]

Degressive or linear, and the guideline rates

Two methods are accepted. Linear depreciation takes the same slice of the acquisition cost every year. Declining-balance depreciation applies the percentage to the remaining book value, giving larger deductions early.

The SECO SME Portal publishes guideline rates for the declining method: 15 percent for office furniture and fixtures, 25 percent for machines and apparatus, 30 percent for motor vehicles, 40 percent for IT and office equipment and 45 percent for tools.[3] For linear depreciation on the acquisition cost, halve these rates.

These are guideline values, not entitlements. Cantons publish their own schedules, a higher actual loss of value can be evidenced, and energy-saving investments may be written off at 50 percent in each of the first two years.[3]

Pick one method per asset and keep it over several years; discuss a mid-life change with your cantonal tax office. If you applied lower rates in a weak year, you may catch up later.[3]

How write-offs flow into tax, AHV and MWST

Depreciation reduces your bookkeeping profit, and income tax follows that profit. Because the Ausgleichskasse generally assesses AHV, IV and EO contributions on net self-employment income, a correct asset schedule pays twice.

VAT follows separate rules. If you are registered and use the effective method, you normally claim the input tax on the whole purchase of movable equipment at once, not in step with the depreciation; later private use can trigger an input-tax correction.[4] If you are not registered, record the gross cost.

Keep every purchase invoice: it evidences the cost, the input tax and the start of service, and it belongs to your retention duties. A write-off without a document can be challenged years later.

When you sell or scrap an asset, compare the proceeds with its remaining book value: the difference is a taxable gain or deductible loss in that year. Remove the asset from your schedule so later years stay correct.[1]

A simple routine that survives an audit

Keep an asset register, a spreadsheet is enough, listing purchase date, description, cost, method and rate, annual depreciation, accumulated depreciation and current book value for each asset.

Update it once a year, at the latest when you prepare the tax return. The self-employed transfer these figures to the depreciation table for Selbständigerwerbende, so register and return must agree.[1]

Reconcile the register with your expense records: new purchases move from costs into assets, disposals drop out, and the year's depreciation appears in your profit calculation. Small inconsistencies are how write-offs get challenged.

facturio keeps your invoices, expenses and records tidy, so the figures behind your asset schedule stay organised. Sources: [1] ESTV, taxation of self-employment; [2] Cantonal Tax Office Lucerne; [3] SECO SME Portal; [4] Federal VAT Act.