Why business meals and representation expenses must be handled rigorously
Client dinners, cocktails after a business event, gifts for strategic partners or tickets to a corporate match: in Switzerland these outlays are among the most frequent — and among the most closely scrutinised — in tax audits and accounting reviews. They are not "prohibited" expenses, but costs that must be clearly linked to business activity, properly documented and recorded with the correct accounting classification.
At the federal level, profit tax and income tax generally allow the deduction of commercially justified representation expenses and business meals. VAT follows stricter rules: for meals and beverages consumed in the course of business activity, input tax deduction is limited to 50% of the corresponding VAT, under current FTA practice (cf. ATF 123 II 295). For employees, meals and entertainment may also constitute a taxable benefit if they do not fall within specific exceptions.
This guide explains how to distinguish expense types, which limits apply, which documents to retain and how to record everything correctly in Accountex, with references updated for 2026.
Business meals, representation and staff meals: what changes
Tax and accounting treatment depends mainly on who participates and what business purpose the expense serves. Confusing the categories is one of the most common mistakes among Swiss SMEs.
| Criterion | Business meal / representation | Staff meals (internal) | Meals while travelling (employee) |
|---|---|---|---|
| Participants | At least one person external to the company (client, supplier, partner) | Employees or internal bodies only | Employee on assignment, often without external guests |
| Purpose | Business relationship, negotiation, acquisition, project follow-up | Company canteen, lunch provided by employer at the workplace | Covering food requirements during business travel |
| Documentation | Always receipt or invoice with list of participants and reason | Canteen contract/supply or market value calculation | Actual receipt or flat-rate per diem (CHF 30 per main meal, excl. VAT) |
| Typical account (SME) | 6360 Representation expenses | 6361 Business meals or 6270 Staff meals | 6361 Business meals / 6674 Verpflegung |
| Input VAT deduction | 50% of VAT on meals and beverages (FTA practice) | Generally excluded if non-taxable or private use | 50% with receipt; 0% with flat-rate per diem |
| Income tax (employee) | Not taxable if actual company expense, not reimbursed as remuneration | Taxable benefit unless exceptions apply (e.g. canteen priced at no less than production cost) | Per diem or documented reimbursement per expense regulations |
Tax limits: profit tax, income tax and social contributions
The rules vary depending on whether the expense is borne by a company, a self-employed professional or reimbursed to an employee.
Companies and profit tax (DBG)
Representation expenses and business meals are deductible if linked to business activity and proportionate (Art. 58 DBG). There is no fixed federal percentage cap on profit, but the tax authorities may challenge manifestly excessive or private expenses.
Gifts to clients, targeted local sponsorships and commercial entertainment fall under the same principle: they must concretely serve business development, not the personal enjoyment of shareholders or managers.
Self-employed professionals and individuals
For sole proprietors, deduction follows the logic of justified business and professional expenses (Art. 27 IFDA). A documented lunch with a client is deductible; a dinner with family or friends is not, even if paid with a company card.
In mixed activities (private and professional), the private portion must be excluded. Good practice is to note guest names and the purpose of the meeting on the receipt within 24 hours.
Representation expense budget for employees
When an employee has a budget to entertain clients, cantonal tax practice provides that amounts within certain limits are not treated as taxable salary — subject to an expense regulations (Spesenreglement) approved by the cantonal authority: generally up to 5% of gross annual remuneration, with an absolute maximum of CHF 24'000.
If these limits are exceeded, or in the absence of internal regulations and supporting documents, the expense may be reclassified as remuneration subject to OASI, occupational pension and withholding tax.
Meals provided to employees
Free or heavily discounted meals generally constitute a taxable benefit, valued at the local market price. A frequent exception: a company canteen whose price is not below production cost.
Meals during ordinary internal meetings are not external representation expenses: they should be treated as staff costs or benefits, with the corresponding social security consequences.
VAT: input tax deduction and common pitfalls
For VAT-registered businesses using the effective method, input tax deduction on meals and beverages consumed in the course of business activity is limited to 50% of the VAT actually shown on the invoice (current FTA practice; cf. ATF 123 II 295). The remaining half of the tax must be recorded as an additional cost, not recoverable.
The limitation also applies when the meal is entirely professional and includes external clients. It does not, however, apply to ancillary event costs (room rental, equipment hire) if invoiced separately and linked to a taxable activity.
| Expense type | Typical VAT rate | Deductible input tax |
|---|---|---|
| Restaurant meal (table service) | 8.1% | 50% of VAT on invoice |
| Take-away / food to go | 2.6% | 50% of VAT on invoice |
| Travel meal per diem (CHF 30, no receipt) | None | 0% — no invoice with VAT |
| Promotional gift (modest amount) | 8.1% or 2.6% | 100% if linked to taxable activity |
| Foreign receipt (restaurant abroad) | Foreign VAT | 0% in Swiss VAT calculation |
Receipt requirements for VAT deduction
- •Supplier VAT UID number (CHE-xxx.xxx.xxx VAT) and date of supply
- •Net amount, rate and VAT amount clearly stated (Art. 26 VAT Act)
- •For amounts over CHF 400 incl. VAT: name and address of recipient (your company)
- •Credit card slip alone is not sufficient: the detailed restaurant receipt is required
Documentation: what to retain for audit and tax review
A representation expense properly recorded but poorly documented remains at risk of adjustment. The FTA and auditors require a clear chain of evidence from payment to business purpose.
1. Original receipt or certified copy
Keep the restaurant receipt, catering invoice or bar receipt. For significant amounts, request an invoice addressed to the company with VAT shown separately.
2. Internal supporting note
On every expense report or Accountex entry, state: date, location, names and companies of participants, purpose of the meeting (e.g. "discussion of 2026 maintenance contract renewal") and who authorised the expense.
3. Up-to-date expense regulations
Internal expense regulations (Spesenreglement) compliant with Art. 327a CO define who may incur expenses, per-person limits and required approvals. This is essential to prevent tax reclassification of reimbursements.
4. Digital retention
In Switzerland, accounting documents must be retained for at least 10 years. Upload attachments directly to the accounting entry: this reduces year-end errors and simplifies work for your fiduciary.
Accounting in Accountex: typical entries
Correct accounting separates net cost, deductible VAT and non-deductible VAT. Here are three recurring scenarios in the SME chart of accounts.
Example A — Client dinner (CHF 324.00 incl. VAT, of which 8.1% VAT = CHF 24.30)
| Account | Description | Debit | Credit |
|---|---|---|---|
| 6360 | Representation expenses (net + 50% non-deductible VAT) | 311.85 | |
| 1170 | Input VAT (50% of CHF 24.30) | 12.15 | |
| 1020 | Bank | 324.00 |
Calculation: net CHF 299.70 + CHF 12.15 (50% non-recoverable VAT) = CHF 311.85 total cost to account 6360.
Example B — Promotional gift to client (CHF 108.10 incl. VAT, rate 8.1%)
Record to 6360 with fully deductible input tax (100%): debit CHF 100.00 to 6360, CHF 8.10 to 1170; credit CHF 108.10 to bank. Attach note with recipient and business relationship.
Example C — Meal per diem reimbursement to employee on business travel
Flat-rate per diem of CHF 30 per main meal without receipt (subject to approved Spesenreglement): debit CHF 30.00 to 6361 (or 6674 Verpflegung), credit CHF 30.00 to 1020 Bank. No input tax. If the employee submits a receipt, apply the 50% VAT rule as in Example A.
In Accountex, create dedicated expense categories with preset VAT rules for restaurant expenses (50% deductible). This avoids manual adjustments at every quarterly VAT closing and keeps accounting and declarations consistent.
Common mistakes and how to avoid them
Labelling everything as representation
Lunches among employees only or private dinners are not representation expenses. Use the correct account and assess the benefit for staff.
Deducting 100% of restaurant VAT
Classic error in quarterly VAT calculation. Correction leads to late payment interest and additional work for your fiduciary.
No external participants
A meal without at least one guest external to the company does not justify account 6360. Always document who was present and why.
No expense regulations
Without an approved Spesenreglement, employee reimbursements may be treated as taxable salary with effects on OASI and withholding tax.
Operational checklist before finalising the entry
- 1Does the expense have a verifiable business connection and is it not of a private nature?
- 2For business meals: is at least one external participant listed with name and company?
- 3Does the receipt meet VAT Act requirements (supplier UID, VAT shown, correct amounts)?
- 4Is VAT on meals and beverages recorded at 50% as input tax?
- 5Does the ledger account (6360, 6361 or other) reflect the true nature of the expense?
- 6Are the digital attachment and descriptive note archived in Accountex?
- 7For employee reimbursements: are expense regulations and supervisor approval complied with?
Orderly management of representation expenses is not just about "passing the audit": it allows you to measure how much the company truly invests in business relationships and to plan the budget with greater precision. With Accountex, traceability from receipt to VAT declaration happens in a single workflow — provided you set up categories, rates and mandatory fields correctly from the start.