Tax Advisors, Fiduciaries & Accountants – Differences & Similarities in Switzerland, Germany and the USA

Generally speaking, the professions of tax advisor, trustee and accountant often appear equivalent or at least similar, but in addition to some similarities, there are also crucial differences that are essential to know depending on the client or customer.

As a rule, tax consultants belong to the liberal professions. Their professional title is legally protected and may only be used in Germany if one has passed the official examination before the Chamber of Tax Consultants. This is not the case in Switzerland, although there is an admission restriction in the field of auditing. Tax consultants concentrate primarily on advising and representing their clients in all kinds of tax and business matters. Their clients include both companies and private individuals. In addition, they also represent clients before the tax authorities and the tax courts.

Accountants perform tasks in finance and accounting. In financial accounting, for example, they record business transactions without gaps and allocate all of a company’s financial flows to specific accounts. Another function is the preparation of balance sheets and financial statements for different accounting periods, e.g. monthly, quarterly or annual financial statements, or they prepare these. Furthermore, they carry out cost and performance accounting, prepare invoices, check incoming payments and incoming invoices, monitor accounts, control financial transactions and ensure the smooth organization of finance and accounting.

Trustees dispose of the rights transferred to them in agreement with the respective principals (trustors). They perform tasks in areas such as accounting, taxes, auditing, property management or management consulting. They also prepare tax returns or social security accounts. In accounting, trustees prepare the annual financial statements, and in auditing they perform audits or credit checks. In the case of insolvencies in Germany, they are appointed by the court and have the power of administration and disposal over the debtor’s assets. There is no protected professional title here, which is why anyone can offer this service.

In Switzerland, it is therefore the case that, due to the non-protected professional titles, the same services can in principle be offered under all fields of activity. Most frequently represented here is the fiduciary, who focuses his services almost exclusively on accounting services or consulting. Thus, he/she behaves like a conglomerate for finance and taxes. In Switzerland, those who do not like to specialize in a particular area work under the term trustee or fiduciary. In Germany, a tax advisor tends to fill this position in everyday understanding.

Accountants and tax advisors only appear in Switzerland under these names if they have a clear focus on these activities in the narrower sense. I.e. an accountant will almost never advise on tax arrangements and a tax advisor will not take care of the annual financial statements of larger entrepreneurs, unless he/she also advises in this area.

In the USA, a tax advisor is comparable to the so-called CPA’s (Certified Public Accountants) or EA’s (Enrolled Agents), the accountant per se to Chartered Accountants and a trustee is commonly found under the term trustee or also fiduciary.

Here, too, it often only becomes clear when talking to the respective service provider what exactly their focus is, i.e. whether they primarily offer business-related services or whether they also have greater expertise in tax matters for private individuals.

If you know in detail or even roughly what you need support with, it is advisable to contact a certified tax advisor or an accountant with your request, since the trustee, as already mentioned, is more of a generalist and tends to have less of the necessary expert knowledge in a corresponding area.

Another important aspect is that trustees and accountants have a clear focus on business-related issues and less on private individuals. This part occupies a rather small place in their specialized training, quite unlike tax advisors, whose training is mostly very detailed and specific.

The work of tax advisors, accountants and trustees can be perfectly combined or merged, which is why only individuals offer exclusively the narrowly defined activity under their title. As a tax consultant, I also process annual financial statements of self-employed persons. Numerous accountants also prepare, for example, the personal tax returns of business owners.
Nevertheless, one should always be aware of the limitations. A fiduciary is usually a generalist in any subject, which he/she should disclose.

Both in my education and in my professional work, I have a broad range of experience in the tax and social security fields, which is why I have specifically chosen not to be called a fiduciary. My focus is on private individuals and the self-employed, rather than on the needs of larger companies. In the areas of accounting, auditing and business consulting, I incorporate the work and opinions of respective experts, as long as the competencies are outside my scope of education and experience. This ensures that I can offer you unrestricted, goal-oriented solutions for every concern.