Let's say someone has two self employed activities. In one, the person makes 100k CHF in a year and in the other the person loses 100k CHF (eg the second job is trading).

Does the person have to pay AHV or taxes?

(According to the initial idea of income tax in the constitution of the US, the person wouldn't need to pay taxes in the US, if I understood Peter Schiff right.)

How is the situation in Switzerland?

Uhm yes? I do not think the tax authorities will waive the taxes on 100k income.


Or do you have a GmbH or something like that?

Maybe just quit trading ?

Two separate companies? What legal structure, sole proprietorship, the limited company (SA) and the limited liability company (SARL)?

If one sole proprietorship than CHF 395 AHV and head tax.

If two sole proprietorships than AHV on 100k, and head tax.
(But I might be wrong)

I think the taxman will say: "Nice try Maxii, here are our bankdetails." Not too sure about CH but here in Germany (after a short period of grace) you pay your taxes in Advance, and they will calculate it from your last years income.

Your mileage may vary depending on the Canton but in principle you can apply the losses from your self-employed activities not only to profits in your other activities but also to your other income (e.g. as an employee, dividends, etc.), provided you remain self-employed.
http://steuerverwaltung.steuerpraxis...D1995FC53.html

For the AHV I presume - but you would need to check - they will simply view all your self-employed activities as one and calculate the dues on the net.

No clue tbh, but I would expect that filing a combined net yearly income of 0,- can have an effect on your permit depending on your situation and assets.

Have you considered real estate?

You can’t have two self employed businesses, you are either self employed or you are no. Assuming that when all the correct legal processes have been applied the total income is zero then no taxes are due. Which leaves you with two questions - what are you going to live on and how are you going to pay the whopping AHV bill you will receive for being able to live on zero income?

It is unusual but possible. It might make sense if you wish to move one of the business into an other legal form as some later stage.

The only legal entity that exists in the OPs question is the natural person, you cannot be two things at once in the eyes of the law. The only way you can split it is to create an other legal entity.

No. They are two legal entities. The natural person and the sole proprietorship. But they are very closely linked regarding liability and taxation. But not so closely that any person expense is also a business expense.

And still, a natural person can have several sole proprietorships (Einzelfirma). Nothing in the law forbids this.
It is inevitable to have more than one sole proprietorships if you enter them in the commercial register and you start to do additional business in an area not mentioned in the register of the first company. Like Jim2007 Wine Trading and Jim2007 IT Consulting.


Edit: And if you do not believe me I gladly refer you to the Swiss Federal Court ruling BGE 110 Ib 24
https://www.bger.ch/ext/eurospider/l...=show_document

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I thought I'd read somewhere that the Swiss government won't let you run an unprofitable business for more than a few years, that they'd shut it down. I don't have a source for that though.

At the very least, claiming one business's losses totally offset the other so you pay no tax is going to raise eyebrows and draw attention.

Trump managed to lose $250,000,000 a couple of years running & over 1 billion over 10 years. I am sure the Swiss tax authorities have seen a few idiots before

Yes, but in the USA you can run a loss-making business and deduct from taxes for pretty much forever. The Swiss seem to think a business should make money at some point or not be a business.

Why would the government care, in the sense of allowing it to keep running, if your business is profitable or not? Provided capital requirements and all kinds of obligations are and keep being met, of course.

Tax-loss carryforwards won't be accepted for more than seven years, after that they're void (usage happens according to "first in first out", i.e. the oldest carryforward is used up first). Are you perhaps mixing the two?

Perhaps. I could imagine the Swiss authorities saying "you're not running a business, you're running a tax-dodging scheme" if you report losses year upon year in order to offset income.

Anyway apologies to OP for veering off-topic.

You can run a loss making business but the authorities will look VERY closely where the income comes from and more importantly at the expenses and costs deducted from the business..........it very rarely works long term

Certainly, they may classify the undertaking as "Liebhaberei", hobby, upon which costs would no longer be tax-deductible. But that's not quite the same as "won't let you run an unprofitable business for more than a few years".

While your quote is accurate, I never claimed this with absolute certainty and even admitted I didn't have a source. Happy to admit I'm wrong and mixed things up.