The end of bankruptcy abuse! New legislation effective 2025

Overview of the main changes

Waiver of the limited audit (opting out)

Companies in Switzerland are subject to an ordinary audit if they exceed two of the following thresholds in two consecutive financial years: (i) total assets of CHF 20 million, (ii) turnover of CHF 40 million and (iii) 250 full-time employees on an annual average. In addition, public companies and companies that are obliged to prepare consolidated financial statements are subject to an ordinary audit in any case. Companies that do not meet these criteria are subject to a limited audit. Companies with fewer than 10 full-time employees on an annual average can waive the limited audit (so-called opting-out).

As of 1 January 2025, the declaration of waiver is no longer retroactively possible (so-called retroactive opting out), but only for future financial years. The waiver must be registered with the commercial register office before the start of the financial year from which it is to apply. Registration of the opting-out at the time the company is founded remains permissible as before.

This means that opting out has been possible since 1 January 2025, for the 2026 financial year at the earliest.

Reporting obligation of the tax authorities

The legislative amendment also includes a new obligation to notify the tax authorities. The commercial register office requires the company to renew the opting-out or appoint an auditor if:

• It receives notification from the cantonal tax authorities that the company has not submitted annual financial statements. The notification is made three months after the submission deadline, or
• Circumstances exist that give the impression that the requirements for waiving a limited audit are no longer met.

If a cantonal tax authority submits a report to the commercial register office and the required documents (annual financial statements) are not submitted within the specified period, this constitutes an organisational deficiency in the company’s organization. The commercial register office will request the company to rectify the deficiency within a specified period, which is generally 10 days. (i) If the company appoints an auditor, it shall notify the commercial register of its entry in the commercial register. (ii) If the company does not appoint an auditor, the commercial register office shall refer the matter to the court, which will take further measures.

Enforcement of public law claims (bankruptcy)

Until 31 December 2024, bankruptcy proceedings for public law claims were excluded - only the seizure of assets was permitted. The company could continue its operations even if, for example, various tax debts were not paid. As of 1 January 2025, public law claims must be pursued in accordance with the general rules on bankruptcy if the debtor is entered in the commercial register. Public-law claims include, for example, taxes, duties, fines, and social security contributions. This is intended to prevent companies that do not pay these claims, for example, from continuing to participate in business transactions and causing additional damage to the public and other market participants.

Compared to the previous seizure, bankruptcy results in the company being de facto incapable of acting in the event of non-payment of outstanding claims (leading to the company’s dissolution). Enforcement procedures filed after 1 January 2025, are subject to the new legislation. Proceedings initiated before 1 January 2025, are only affected by the new regulation if no seizure order has yet been issued.

How can we support you?

Due to the latest legislative amendments, we recommend that domestic legal entities closely analyse their internal accounting processes and tax compliance in depth to ensure that payment deadlines (e.g. for tax claims) are met and that tax returns are submitted on time with the necessary attachments.

In the event of payment difficulties, it is advisable to contact the relevant tax authorities (cantonal tax administration and SFTA) and compensation offices at an early stage to agree a possible payment settlement.

Article written by Dominique Roggo, André Kuhn and Emilien Gigandet