2026 tax deductions for SMEs: what directors overlook (and what it costs them)

Every year, hundreds of Geneva SMEs pay too much tax — not because they earn too much, but because they fail to claim all the deductions they are entitled to. The usual reflex is to deduct office rent, supplies and telecoms costs, and stop there. Yet the catalogue of deductions allowed by the Geneva tax authorities is much broader.

Let's start with entertainment expenses and business meals. Contrary to popular belief, these costs are deductible to the extent of their business purpose, provided you can justify them (Art. 27 of the Swiss Federal Direct Tax Act, LIFD, and Federal Tax Administration circular no. 1-027-DVS-2024). A lunch with a potential client, an invitation to a trade fair, or train tickets to meet a supplier in Zurich — all fall into this category. The tax authority accepts a flat rate of CHF 35 per business meal per person, beyond which detailed justification is required. For an SME that entertains two clients per week, this represents nearly CHF 3,500 in annual deductions.

The company vehicle is another underused item. If you use your personal car for business purposes, you can deduct 70 centimes per kilometre driven for business trips (excluding home-to-work commuting), in accordance with Art. 28 LIFD and the Federal Ordinance on Vehicle Expenses. But if the vehicle is owned by the company and used for mixed purposes, accurate tracking of private vs business kilometres allows you to optimise the deduction. A Geneva SME with a salesperson covering 15,000 business kilometres per year can deduct nearly CHF 10,500, not counting maintenance, insurance and leasing interest.

Employee training is also deductible — not only training directly linked to the current position. Language courses, management training, professional certifications and even industry conferences qualify as business expenses. For an employee taking a CHF 3,000 course per year, the company deducts the full cost AND the employee pays no tax on this benefit. Many directors also overlook that apprentice training costs qualify for additional deductions specific to the canton of Geneva.

Interest on business loans is another frequently forgotten deduction. Whether it is a bank loan to finance an investment, an authorised overdraft related to cash-flow needs, or leasing interest, it is all deductible. You simply need to ensure the link with the business activity is clearly established in the accounts. An investment loan of CHF 200,000 at 3.5% generates CHF 7,000 in annual deductible interest, representing a significant tax saving for an SME.

Finally, the home office deserves special attention. Since the widespread adoption of remote work, the Geneva tax authorities allow a deduction for a professional space at home, provided it is exclusively used for business (Art. 29 LIFD and FTA circular no. 1-029-DVS-2024 on home-office expenses). The deduction is calculated pro-rata based on area: a 15 m² office in a 100 m² apartment allows you to deduct 15% of rent, utilities and home insurance. On a monthly rent of CHF 2,000, that is CHF 3,600 per year. Furniture, lighting and heating costs can be added to this deduction.

Our advice: don't leave these opportunities on the table. A comprehensive tax review by a professional, before you file your return, systematically identifies every deduction your business is entitled to. At MVO Fiducia, we tailor this analysis to every SME we support in Geneva. The cost of the service is often lower than the tax saving achieved. Contact us for an initial no-obligation meeting.