Accounting for a Swiss association: what to keep, and how

Sports club, choir, professional association, NGO: a Swiss association keeps its accounts under more flexible rules than a company — but not without rules. This guide covers what the law requires in your situation, who checks the accounts, what differs from a business (membership fees, donations, subsidies, restricted funds) and VAT.

What the law requires: two levels

The committee keeps the association's books, and the accounting rules of the Code of Obligations (CO) apply by analogy (Art. 69a of the Swiss Civil Code, CC). In concrete terms, everything depends on one question: is the association required to register in the commercial register?

Registration is required in particular when the association runs a commercial business to achieve its purpose, or when it is required to have its accounts audited (Art. 61 para. 2 CC). Since 2023, it is also required when the association's main activity is collecting or distributing funds abroad for charitable, religious, cultural, educational or social purposes — except for small organisations that meet the exemption conditions (Art. 61 para. 2 no. 3 and para. 2ter CC). A registered association must also keep a list of its members (Art. 61a CC).

In both cases, books and supporting documents must be kept for ten years (Art. 958f CO).

Who checks the accounts?

• Ordinary audit by an audit firm if, in two consecutive financial years, two of the following three thresholds are exceeded: a balance sheet total of CHF 10 million, turnover of CHF 20 million, 50 full-time positions on an annual average (Art. 69b para. 1 CC). These thresholds are lower than those for a company limited by shares, and an association subject to audit must register in the commercial register.
• Limited audit if a member who is personally liable or required to make additional contributions demands it (Art. 69b para. 2 CC).
• Otherwise, the articles of association and the general meeting organise the review as they see fit (Art. 69b para. 4 CC). In practice, the general meeting elects account auditors (often two members), who present their report before the accounts are approved.

What differs from a business

Three types of income, three treatments

An association lives on membership fees, donations and sometimes subsidies. The three are not booked the same way, especially if the association is registered for VAT:

• membership fees set by the articles of association;
• donations and bequests, which are not consideration for any service;
• subsidies and other contributions from public authorities.

Keeping them apart from the moment they are entered is what lets you present readable accounts to the general meeting — and a correct VAT return.

No share capital: the association's own funds

An association has neither share capital nor partners to pay. Its equity is the organisation capital: the surpluses accumulated over the years. The year's result is added to it (or deducted from it); there is no dividend.

Restricted funds

A donation earmarked for a specific purpose — “for the new jerseys”, “for the summer camp” — does not belong freely to the association: it must be used for that purpose. It is tracked in a restricted fund, shown under liabilities. In years when the donation has not yet been spent, it is allocated to the fund; when the expense occurs, the fund is used. The income statement thus stays honest: a large donation received in December does not make the year look exceptional.

Swiss GAAP FER 21: for organisations that raise donations

The Swiss GAAP FER 21 standard is aimed at non-profit, public-benefit organisations. The law does not impose it on an association, but it is mandatory for the Zewo seal of approval, and 20% of the members can require financial statements prepared under a recognised standard (Art. 962 para. 2 CO). It asks for more than ordinary accounts: a balance sheet that separates fund capital — funds restricted by donors — from organisation capital, a cash flow statement, a statement of changes in capital and a performance report.

VAT for an association

Registration. The general threshold is CHF 100,000 of turnover from taxable supplies. It rises to CHF 250,000 for non-profit, volunteer-run sports or cultural associations and for public-benefit institutions (Art. 10 para. 2 let. c of the VAT Act, VATA). Only turnover from supplies that are not excluded from the tax counts: membership fees and donations are not part of it. An organisation is “public-benefit” for VAT purposes when it is exempt from direct federal tax on that ground (Art. 3 let. j VATA).

If the association is registered for VAT:

For the reduction due to subsidies, the FTA (Federal Tax Administration) accepts two methods: tacit taxation of the subsidy at the standard rate (8.1% out of 108.1%) or an allocation key — the share of subsidies in total income, applied to input tax (VAT Info 09, section 2.3). The choice is yours; your fiduciary can help you make it.

Direct taxes

An association is a legal entity, taxed on its profit and capital. However:

• membership fees are not part of taxable profit (Art. 66 para. 1 DFTA);
• for direct federal tax, a profit below CHF 5,000 is not taxed (Art. 71 para. 2 DFTA), nor is a profit of up to CHF 20,000 allocated exclusively and irrevocably to non-profit (ideal) purposes (Art. 66a DFTA); above that, the entire profit is taxed, at a rate of 4.25% (Art. 71 para. 1 DFTA). The cantons set their own limits;
• an association pursuing a public-benefit purpose can apply for exemption (Art. 56 let. g DFTA); its donors can then deduct their donations, up to 20% of their income or profit (Art. 33a and 59 DFTA).

How BeMyTalent adapts

When you activate accounting, you choose the legal form Non-profit association. The chart of accounts adapts straight away:

• 3500 Cotisations des membres (membership fees, excluded from VAT), 3510 Dons et legs (donations and bequests, box 910), 3520 Subventions et contributions publiques (subsidies and public contributions, box 900), 3530 Sponsoring (sponsorship, standard rate — switch it to an excluded supply if your association is recognised as public-benefit), 3540 Recettes de manifestations (event income, rate chosen on each line);
• 2700 Fonds affectés (restricted funds) and 6620 Variation des fonds affectés (change in restricted funds);
• equity in the organisation's name, with the accounts specific to companies (dividends, statutory reserves) hidden.

The rest follows: membership fees invoiced by QR-bill, payments reconciled with your bank statements, the VAT return ready to file with boxes 900, 910 and 420 if you are registered, and payroll if the association employs staff. You keep double-entry accounts, more complete than the legal minimum for a small association: the balance sheet and income statement are ready for the general meeting and for your account auditors.

BeMyTalent does not replace your fiduciary: it takes the data entry off their hands. You keep the final say on every entry.

Other legal forms: foundation, GmbH (Sàrl), AG (SA), simple partnership. To choose a tool: the guide to Swiss accounting software.

FAQ

Does a small association have to keep accounts?

Yes. An association that is not required to register in the commercial register can limit itself to accounts of income and expenditure and a statement of its asset position (Art. 957 para. 2 CO). Supporting documents are kept for ten years.

Who has to check an association's accounts?

Large associations (two of the three thresholds of CHF 10 million balance sheet total, CHF 20 million turnover and 50 full-time positions) have an ordinary audit; a limited audit can be required by a personally liable member. Otherwise, the articles of association and the general meeting organise the review — most often, the general meeting elects account auditors.

Are membership fees subject to VAT?

No, for the fees of active members set by the articles of association of a non-profit organisation: they are excluded from the tax (Art. 21 para. 2 no. 13 VATA) and do not count towards the registration threshold. Fees from passive members are treated as donations.

How do you book a donation earmarked for a project?

As a donation, then, as long as it has not been spent, by allocating it to a restricted fund under liabilities. When the expense occurs, the fund is used. That way, the year's result is not inflated by a donation that is not freely yours.

Does an association pay taxes?

It is taxed as a legal entity, but membership fees are not part of its profit, a profit of up to CHF 20,000 allocated to its non-profit purposes is not taxed at federal level, and a public-benefit association can be exempt. Your cantonal tax administration sets out the cantonal rules.

Try BeMyTalent free — choose “Non-profit association” when you activate accounting, and the chart of accounts adapts. → Start the trial