The necessity of performing turnover reconciliations in Switzerland

VAT'S IMPORTANT - NEWSLETTER 2026 - 01

NEWSLETTER 2026 - 01

The necessity of performing turnover reconciliations in Switzerland

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Introduction

In the present case, the Swiss Federal Tax Authority (SFTA)  identified discrepancies between the income reported in the income statement and the turnover declared by the VAT returns. The SFTA challenged the taxpayer on its accounting and calculated the differences. In its ruling A-6941/2024 of December 9, 2025, the Swiss Federal Administrative Court concluded that the appellant was unable to prove that the accounting records of the services did not correspond to the economic reality.

Summary

The appellant lodged an objection against an assessment notice from the SFTA and

argued in particular that the documents they had submitted had not been taken into account. In addition, they claimed to have clear sales figures and lists that the FTA could inspect on site. Despite repeated attempts by the SFTA, no further documents were submitted.

In the present case, the Swiss Federal Administrative Court examined whether the turnover differences requested by SFTA were lawful. Because the turnover declared by the appellant in its VAT returns did not correspond to the accounting records, the SFTA charged the difference it had identified. The appellant disputed the turnover reconciliation carried out by the lower court. It was undisputed that the appellant had never submitted a turnover reconciliation for any of the tax periods audited and that the declared sales did not correspond to those shown in the accounts. Corrective VAT returns have never been submitted.

The Swiss Federal Administrative Court noted that, as a VAT taxpayer, the appellant was obliged to keep its books and records in accordance with commercial law principles. In doing so, it had to record all business transactions completely and systematically on the basis of supporting documents. The audit trail had to be guaranteed for all business transactions.

In the opinion of the Swiss Federal Administrative Court, the appellant did not explain why the figures taken from the income statements by the SFTA were inaccurate or why its own figures better reflected the actual circumstances. Since it did not provide any comprehensible reasons for the discrepancies, the total sales figures resulting from the accounting records remain decisive and it was correct how the SFTA prepared its own turnover reconciliations which was the base for the additional identified charges of the SFTA.

This ruling clearly shows how important it is for VAT-registered companies to keep their books and records in accordance with commercial law principles. In doing so, they must record all business transactions completely and systematically on the basis of supporting documents. The audit trail must always be guaranteed for all business transactions. In addition, the ruling emphasizes how important it is to regularly reconcile sales, check for any discrepancies, and draw the appropriate conclusions.

We will be happy to assist you with any questions you may have in the area of VAT.

Your terraVAT team

Sabrina Frey Dr. Florian Hanslik

Manager Founding Partner