Deducting company formation costs: getting the most from your tax return

Founding costs money: advice, equipment, registration fees, software. The good news: a large share is tax-deductible – even if your first franc of revenue is still far away. Here is what you can deduct, what must be capitalised, and which records convince the tax authority.

The principle: pre-launch costs are business expenses

Tax law follows the causation principle: an expense is deductible if it is caused by your (future) self-employed activity. Timing does not matter – only the connection. This applies to:

• the sole proprietorship (deduction in your private tax return as self-employment expenses)
• the GmbH (costs belong to the company; formation costs are capitalisable)

Important: the sole proprietorship declares the deductions in the self-employment form; the GmbH books the costs in its accounts. How to structure a young company’s bookkeeping is explained (in German) on buchhaltung-für-selbständige.ch: starting your bookkeeping.

Deductible: the typical list

Cost type	Treatment
Advisory (fiduciary, lawyer, platform)	Immediately deductible
Computer, office furniture	Deductible up to CHF 1,000/item, above that depreciation
Software and subscriptions	Immediately deductible (running costs)
Training, certificates	Immediately deductible if work-related
Advertising, website, ads	Immediately deductible
Preparatory travel expenses	Deductible under expense rules
Commercial register fee (sole proprietorship)	Immediately deductible
Notary and formation (GmbH)	Capitalisable, depreciable
Share capital	Not deductible – it is equity, not an expense

The actual GmbH formation costs (notary, register) are capitalisable and depreciable over several years. Depreciation follows the FTA rates – an article (in German) on buchhaltung-für-selbständige.ch details depreciation for the self-employed.

The three most important rules

1. Collect receipts from day one. Every invoice with date, amount and purpose, archived – ideally digitally.
2. Separate private and business. A separate business account makes attribution unambiguous. The (German) guide on gründer-schweiz.ch compares business accounts for freelancers.
3. Document the timeline. Note when your activity started and which expenses preceded it – this builds trust.

Input tax: the underestimated bonus

If you become VAT-registered (or register voluntarily), you can reclaim VAT on formation investments as input tax – retroactively for investments made before registration (as a rule 180 days). On a CHF 2,000 laptop that is CHF 150 or more. Registration conditions are described in VAT for new companies.

Common mistakes

• Share capital booked as an expense – it is capital, not a cost.
• Private expenses mixed in – family subscriptions, holidays, personal devices.
• Invoices without proof of payment – keep bank statements alongside.
• Capitalisation threshold ignored – items from CHF 1,000 belong in the fixed-asset register.

What to do concretely

1. Open a business account and route all formation expenses through it.
2. Keep a simple journal (date, amount, purpose, receipt) – templates are available (in German) on rechnungslösungen.ch.
3. Scan and archive in the cloud (10-year obligation).
4. Declare the expenses consistently with your fiduciary or in your tax return.

If formation still lies ahead: our provider comparison shows which platforms include which services. For what matters tax-wise after founding, the (German) guide on selbständige.ch about taxes for the self-employed is the right read.