Commercially justified provisions can be formed and deducted if compliant with corporate law. Provisions can be made for risks or obligations that occurred before the end of the business year and whose amount and definitive existence is not yet clear.
Reserves can be set up from profits (retained earnings) or from paid in capital (reserves from capital contributions). In either way it cannot be deducted from the taxable income. However 10% of the taxable income up to CHF 1 million can be assigned to a reserve for research and development.