Corporate Taxation

Interest circulars 2024 published by the SFTA – specific adjustments and what taxpayers need to consider

On 29 January 2024 and 30 January 2024 respectively, the Swiss Federal Tax Administration (“SFTA”) published the circular letters on the tax-recognised interest rates for 2024 for advances or loans in Swiss francs (CHF) and in foreign currencies (so-called “safe haven” interest rates).

Minimum interest rate for advances to shareholders or related parties:

Financed by equity:

  • CHF: 1.5%
  • EUR: 2.5%
  • USD: 4.25%.

Financed by debt capital:

  • CHF: financing costs plus a margin of 0.25% – 0.50%; but at least 1.5%.
  • Foreign currencies: financing cost plus a margin of 0.5%; however, at least the minimum interest rate according to the corresponding currency (or at least the minimum interest rate in CHF, if the interest rate in the foreign currency is lower).

Maximum interest rate for advances from shareholders or related parties:


Operating loans:

Up to an amount of CHF 1 million:

  • 3.75% for trading and manufacturing companies,
  • 3.25% for holding and asset management companies;

From an amount of CHF 1 million:

  • 2.0% (2023: 2.25%) for trading and manufacturing companies,
  • 1.75% (2023: 2%) for holding and asset management companies.

Property loans:

Up to a loan-to-value ratio of 2/3 of the market value of the property:

  • 2.25% for residential and agricultural properties,
  • 2.75% for industrial and commercial properties;


  • 3.0% for residential and agricultural properties,
  • 3.5% for industrial and commercial properties.


Analogous to the SFTA circular on tax-recognised interest rates 2024 for advances or loans in CHF, the same spread (up to the equivalent of CHF 1 million 2.25 % or 1.75 %; from the equivalent of CHF 1 million 0.50 % or 0.25 %) can be taken into account for operating loans in foreign currencies.

Therefore, the following maximum interest rates apply for an operating loan of EUR 10 million:

  • Up to an amount of CHF 1 million (or equivalent in EUR):   2.5% + 2.25% = 4.75%
  • From an amount of CHF 1 million (or equivalent in EUR):   2.5% + 0.5% = 3.0%

For an operating loan of USD 10 million, the following maximum interest rates apply:

  • Up to an amount of CHF 1 million (or equivalent in USD):   4.25% + 2.25% = 6.5%
  • From an amount of CHF 1 million (or equivalent value in USD):   4.25% + 0.5% = 4.75%

“Safe Haven”

The interest rates in the SFTA circulars are determined on the basis of capital market yields on long-term bonds in Swiss francs. Firstly, the average between an index of the domestic bond market (SWIBO Dom T or SBI DOM), the yield on public bonds and the yield on bank/industrial bonds is calculated. The result is compared with the yield on 10-year Swiss bonds and the relevant interest rate is derived from this. The Circular is exclusively based on bonds from issuers with high or very high credit ratings.

The interest rates published by the SFTA are deemed to be “safe haven” interest rates. Taxpayers whose loan relationships are subject to interest within the framework of the circulars published by the SFTA can assume that the interest rates will be accepted by the Swiss tax authorities as compliant with the arm’s length principle without further evidence.

According to the circular, taxpayers are free to prove that a deviating interest rate is at arm’s length. Such evidence can be provided, for example, by means of a transfer pricing study prepared in accordance with the OECD Transfer Pricing Guidelines (OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022, Chapter X). The OECD Transfer Pricing Guidelines are identical in status to the OECD Commentary on the Model Tax Convention. They are the separate transfer pricing section of the commentary on Art. 9 para. 1. The OECD Transfer Pricing Guidelines have no direct normative force in Switzerland, but can be used as an aid to interpretation. With regard to transfer pricing studies, it is important that the data basis used and the methodology applied are prepared in a transparent and comprehensible manner. If there is a third party-loan with comparable conditions, such interest rate may be used as proof of third-party conformity. However, the specific individual case must be examined in this regard.

Tax consequences of corrections by the tax authorities

If the interest rates applied by the taxpayers are outside the “safe haven” interest rates and the arm’s length conformity cannot be proven, there is a risk that a hidden dividend distribution or a hidden capital contribution could be assessed by the respective tax authorities.

Such hidden dividend leads to a profit adjustment. In addition, withholding tax of 35% is owed on the amount of the hidden dividend, which must be passed on to the recipient of the hidden dividend. If the withholding tax is not passed on, the hidden dividend is regarded as a net payment and the withholding tax is calculated on this basis. The effective withholding tax burden thus rises to around 54%. The refund conditions must be checked on a case-by-case basis. As a full refund is not always possible depending on the constellation, the interest rates should be set and documented from the outset within a framework that is in line with the arm’s length principle. The tax consequences of hidden capital contributions must be evaluated on a case-by-case basis.

What do taxpayers need to consider?

Taxpayers, who cannot prove that the interest rate applied conforms to third-party prices, should review their loan relationships for 2024 to ensure that they still comply with the “safe haven” interest rates published by the SFTA. The “safe haven” interest rates are applicable for the calendar year 2024.

An adjustment of the interest rates should be contractually agreed in each case. This can be done by means of an addendum to the loan agreement or with a dynamic reference in the original loan agreement.

According to case law, the SFTA circulars should not be applied schematically, but rather taking into account the circumstances of the individual case. For the application or relevance of the recognised interest rates in the SFTA circulars, the financial relationship to be assessed must be comparable from the outset with the bases used to calculate the recognised interest rates. For this reason, short-term investments, for example, are not comparable with long-term investments. Consequently, the SFTA circulars and the interest rates determined for long-term investments do not apply to investments of a short-term nature. The “safe haven” interest circulars only apply to long-term loans. For short-term loans, an individual comparison must be made. In accordance with the practice of the SFTA, long-term cash pooling receivables are effectively reclassified as loans to which the above-mentioned “safe haven” interest rates apply and not the actual (lower) cash pool interest rates.

Swiss taxpayers who determine the interest rate for loan relationships with related parties in the EU by referring to the interest circular should also take EU Directive 2018/822 (DAC 6) into account. The reliance on this unilateral “safe haven” provision generally gives rise to a reporting obligation. In addition, proof of third-party price conformity is recommended for cross-border loans.

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