Switzerland publishes updated safe harbour interest rates for 2024

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  • Blog
  • 5 Minute Read
  • 02/02/24

The SFTA published two circulars outlining the safe harbour interest rates applicable for 2024 earlier this week

Michalis Louca

Michalis Louca

Director, Transfer Pricing and Value Chain Transformation, PwC Switzerland

In the circular letters dated 29 January and 30 January 2024, the SFTA published the safe harbour interest rates applicable to shareholder and intercompany loans, denominated in Swiss Francs and foreign currencies, applicable for 2024. The Swiss Franc transaction safe harbour interest rates included in this year’s circular remain largely unchanged whilst most foreign currency transaction rates have decreased compared to the interest rates that were applicable for 2023.

Swiss taxpayers can deviate from these interest rates so long as they are able to demonstrate that the interest rates that they apply are in line with the arm’s length principle – in practice, this means that the interest rates must be supported by a transfer pricing study.

Swiss Franc transactions

1. For loans denominated in Swiss Francs, made to shareholders and affiliated parties, the interest rates that a Swiss resident shall receive at a minimum are as follows:
Loans to related parties (in Swiss francs) Interest rate
Loans financed through equity 1.50%
Loans financed through debt: the actual interest incurred plus 0.50%
on amounts up to CHF 10m, or plus 0.25% on amounts exceeding CHF 10m

margin: 0.25% to 0.50%

(Total minimum: 1.50%)

The minimum interest rates for loans in Swiss Francs given by a Swiss resident company to a shareholder or related party in 2024 remain unchanged compared to 2023. 

2. For loans denominated in Swiss Francs, received from shareholders and affiliated parties, the maximum interest rates payable by Swiss entities are as follows:
Loans to related parties (in Swiss francs) Interest rate  
Real estate loans Housing and agriculture Industry and commerce
Up to a loan in the amount of the first mortgage
(i.e., 2/3 of the market value of the property)
2.25% 2.75%
Remainder with the following maximum rates for debt financing: 
  • Building land, villas, condominiums, vacation homes and factory properties up to 70% of market value
  • Other properties up to 80% of the market value
3.00% 3.50%
Operating loans    
Swiss trading or production company for an operational loan: 3.75% on amounts up to CHF 1m, or 2.00% on amounts exceeding CHF 1m 2.00% - 3.75%
Swiss holding or asset administration company for an operational loan:
3.25% on amounts up to CHF 1m, or 1.75% on amounts exceeding CHF 1m
1.75% - 3.25%

Foreign Currency transactions

The table below shows the safe harbour interest rates applicable for 2023 and 2024.

For loan receivables of a Swiss company, these are the minimum rates that must be charged to a related party (note: if the CHF safe harbour rate is higher, then this higher rate has to be charged). If a loan is debt financed, then a minimum spread of 0.50% has to be applied.

These interest rates are basically also the maximum interest rates that a Swiss entity can pay to a related party. However, for loans payables of a Swiss company, the difference between the CHF minimum and maximum interest rates can be added i.e., for operating loans of a trading company a spread of 2.25% (for loans up to CHF 1m) respectively of 0.50% (for loans exceeding CHF 1m).

Country Currency 2023 2024
European Union

EUR

3.00

2.50

USA

USD

3.75

4.25

Australia AUD 4.25 4.25
Brazil BRL 12.75 10.25
Canada CAD 3.75 3.50
China CNY 3.00 3.00
Czech Republic CZK 5.50 4.00
Denmark DKK 3.25 3.00
Hong Kong HKD 4.25 3.00
Hungary HUF 11.00 5.50
India INR 7.00 7.00
Israel ILS 3.25 3.75
Japan JPY 0.50 0.50
Malaysia MYR 3.75 3.75
New Zealand NZD 4.75 4.50
Norway NOK 3.50 3.50
Poland PLN 7.00 4.75
Romania RON n.a. n.a.
Russia RUB n.a. n.a.
Singapore SGD 4.00 3.00
South Africa ZAR 8.75 8.25
South Korea KRW 3.25 3.00
Sweden SEK 3.25 2.75
Thailand THB 3.00 2.75
United Arab Emirates AED 4.00 4.25
United Kingdom GBP 5.25 3.75

 

It is important to note that whilst the interest rates listed above are safe harbours from a Swiss perspective, if a transaction is between a Swiss company and a foreign counterparty, a transfer pricing study will need to be performed to demonstrate that the selected interest rates are at arm’s length.

Taxpayers should also be mindful that transactions between a Swiss company and an EU based counterparty that utilise the safe harbour rates will need to disclose the transaction in the counterparty location as part of the DAC 6 regime.

Transfer pricing is growing in importance for tax administrations in Switzerland. This is also evidenced by the detailed report issued by the SFTA on January 23, 2024. For insights on the recent report issued, refer to our blog post here.

Considering the emphasis put on transfer pricing worldwide it is imperative for businesses to maintain and apply policies that are compliant with transfer pricing rules both here in Switzerland and in other countries.  

If you have any questions regarding transfer pricing or need any assistance, feel free to reach out to us. 

Would you like to learn more about our transfer pricing services?

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David McDonald

Partner and TP/VCT Leader, PwC Switzerland

+41 75 413 19 10

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Michalis Louca

Director, Transfer Pricing and Value Chain Transformation, PwC Switzerland

+41 58 792 47 18

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Agoston Lorincz

Senior Manager, Transfer Pricing and Value Chain Transformation, PwC Switzerland

+41 58 792 46 09

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Martina Walt

Partner, Leiterin Steuerabteilung, PwC Switzerland

+41 58 792 68 84

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Gilia Brault

Senior Manager, Transfer Pricing and Value Chain Transformation, PwC Switzerland

+41 58 792 9690

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Etienne Michaud

Senior Manager, Transfer Pricing and Value Chain Transformation, PwC Switzerland

+41 58 792 96 70

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