Why the distinction matters for your SME
To expand their sales network without opening branch offices, many Swiss SMEs rely on external partners: commercial agents or distributors. At first glance the two roles may seem equivalent, but legally, fiscally and in accounting terms they produce very different effects. Confusing them can lead to errors in invoicing, VAT, management of trade receivables and recording of commissions.
The commercial agent acts on behalf of the principal: they promote products or services, conclude contracts in another party's name and receive a commission on sales generated. The distributor, by contrast, purchases goods or resale rights and transfers them to end customers or resellers in their own name, assuming the business risk linked to stock, pricing and customer default.
This guide compares the two models in the context of the Code of Obligations (CO), the Value Added Tax Act (MWSTG) and Swiss accounting standards (CO art. 957a et seq. and Swiss GAAP FER), with practical references for business owners, administrative managers and fiduciary firms assisting SMEs in 2026.
Comparison table: commercial agent vs distributor
The starting point is always the contract and the economic substance of the transaction, not the label used by the parties. Here is a concise comparison of typical profiles:
| Criterion | Commercial agent | Distributor |
|---|---|---|
| Typical legal basis | Art. 418a et seq. CO (agency) | Art. 184 et seq. CO (sale of goods) + distribution agreement |
| Contracting party vis-à-vis the customer | The principal (subject to exceptions) | The distributor itself |
| Ownership of goods | Remains with the principal until delivery to the customer | Passes to the distributor upon purchase |
| Partner's revenue | Commission (% or fixed amount) | Margin between purchase price and selling price |
| Customer default risk | Generally borne by the principal | Borne by the distributor |
| Warehouse and inventory | Possible consignment; stock normally held by the principal | Inventory on the distributor's balance sheet |
| Invoice to end customer | Issued by the principal (or via disclosed agent) | Issued by the distributor |
| Employment relationship | Generally self-employed; watch for reclassification as employment | Sole proprietorship or trading company |
| Principal's ledger accounts | Commission expense + direct trade receivables | Revenue from sales to distributor; no receivable from end customer |
| End of relationship | Indemnity under art. 418u CO if significant expansion of customer base | Buy-back of stock and contractual transition clauses |
Contractual relationship: essential clauses
A well-drafted contract avoids accounting ambiguities and disputes at year-end. SMEs should define at least the following elements:
Commercial agency agreement
- Assigned territory and customer base (exclusive or non-exclusive)
- Authority to represent: disclosed or undisclosed agent
- Commission calculation basis: net invoiced, collected or delivered amount
- Reporting obligations and transmission of orders
- Notice period and termination indemnity (art. 418u CO)
- Clause on customer data processing (FADP)
Distribution agreement
- Purchase terms: discounts, price lists, minimum quantities
- Title and transfer of risk (Art. 185 CO)
- Returns policy, warranty and after-sales support
- Promotion obligations and purchase targets
- Buy-back of remaining inventory at end of relationship
- Non-compete restrictions and contract duration
Courts and the tax authorities assess the substance of the relationship, not the name given to the contract. If a "distributor" never purchases goods, assumes no risks and only invoices commissions, the relationship may be reclassified as an agency — with implications for VAT, receivables and indemnities.
Commissions: calculation, accrual and documentation
The commission is the agent's remuneration for intermediary activity. Under the CO, the agent is entitled to commission on every transaction concluded during the mandate and on transactions concluded shortly after termination, if the result is attributable to their activity (art. 418d CO).
In SME practice, the calculation basis must be defined precisely in the contract and replicated in management systems:
| Method | Typical formula | When to use it |
|---|---|---|
| Percentage of turnover | Net revenue × rate (e.g. 8–15%) | Recurring sales, SaaS, services |
| Commission on collection | Amount collected × rate | Sectors with high default risk |
| Fixed amount per order | CHF X per signed contract | Standardised-value B2B projects |
| Tiered structure | Increasing rate above turnover thresholds | Incentive to achieve annual targets |
Documents to retain
For each settlement period: sales extract per agent, detail of orders included/excluded, credit notes deducted, any reversals for returns or non-performance. Retain documentation for at least ten years (art. 958f CO). A commission statement signed by the agent reduces disputes during audit or tax inspection.
Accounting on the principal's side (supplying SME)
For the principal, the sale to the end customer generates revenue and VAT; the commission is a distribution cost. Here is the typical accounting scheme under the Swiss chart of accounts (Kontenrahmen KMU):
| Transaction | Debit account | Credit account |
|---|---|---|
| Invoice to end customer | 1100 Trade receivables | 3000 Revenue + 2200 Output VAT |
| Agent commission accrual | 6200 Commission expense | 2030 Payables to agents / accruals |
| Commission payment | 2030 Payables to agents | 1020 Bank |
| Sale to distributor | 1100 Trade receivables from distributor | 3000 Revenue + 2200 VAT + 1200 Inventory (goods out) |
Commissions accrued but not yet settled must be recorded at year-end as accrued liabilities (art. 958b CO), in compliance with the accrual principle. If the agent is domiciled abroad, verify withholding tax obligations and treaty provisions to avoid double taxation.
Accounting on the agent's or distributor's side
Self-employed commercial agent
Commissions received are business revenue (account 3000). Deductible costs include travel expenses, marketing, professional liability insurance and AHV/IV/EO contributions based on profit or notional salary if operating as a partnership.
The agent invoices the principal with VAT (unless exempt from liability under art. 10 para. 2 MWSTG). If worldwide taxable turnover from taxable supplies does not exceed CHF 100,000, they may remain exempt from VAT, but must monitor the threshold.
Distributor
Purchases goods to account 1200/2000 and sells to account 3000. The trading margin emerges in the income statement. Manages trade receivables from end customers, write-downs, physical inventory and any volume discounts from the supplier (off-invoice bonuses to be recorded correctly).
For obsolete stock, apply write-downs in compliance with Swiss GAAP FER. The relationship with the supplier does not generate commissions but margins: profitability depends on working capital management.
VAT and invoicing: common scenarios
Disclosed agent: the principal invoices the customer directly and charges VAT on the full price. The commission paid to the agent is an intermediary service; if both parties are taxable, the agent invoices commission + VAT to the principal.
Undisclosed agent: the agent may appear as the contracting party vis-à-vis the customer provided they act on behalf of the principal; VAT accounting requires care and documentation of the mandate. When in doubt, specialist advice avoids adjustments.
Distributor: two distinct transfers — supplier → distributor and distributor → customer. Each link applies VAT on its own price. Retroactive supplier discounts may be handled as a credit note or reduction of purchase cost.
Exports: if the agent or distributor sells abroad, verify the place of supply (art. 8 MWSTG) and, for exports of goods, the conditions for exemption (art. 23 MWSTG), with customs documentation or proof of transport.
Operational checklist for Swiss SMEs
- Verify the classification of the relationship — agent, distributor or hybrid; align contract, invoicing flows and accounting entries.
- Configure the commission plan — calculation basis, exclusions (VAT, shipping, discounts), settlement frequency and approval.
- Automate data extraction — link CRM, invoicing and accounting to avoid untraceable manual Excel calculations.
- Accrue accruals and indemnities — commissions accrued at year-end and estimate termination indemnity under art. 418u CO where applicable.
- Check VAT documentation — correct invoices, credit notes for returns that reduce the commission base.
- Monitor receivables and inventory — with agent: trade receivables from end customers; with distributor: exposure to the partner and inventory obsolescence on the distributor's side.
- Review the contract annually — targets, territories, rates and review clauses in case of a change in business model.
How Accountex simplifies management
Managing agents and distributors across multiple channels requires consistency between sales, acquisition costs and period-end closing. Accounting software designed for Swiss SMEs allows you to record commissions per partner, generate reports for the principal and settle accruals at month-end or quarter-end without manual reconciliations.
With Accountex you can link sales invoices, credit notes and payments to agents in a single workflow, maintaining traceability for internal audit and VAT reporting. Income statement reports highlight distribution expenses separately from direct costs, offering a clear view of profitability by channel — useful when deciding whether to invest in a local agent or a regional distributor.
Social security, employment status and reclassification risks
An agent who works exclusively for a single principal, follows imposed hours and uses the principal's equipment risks being classified as an employment relationship. The consequences affect AHV, BVG, accident insurance and withholding tax.